Inflation reduces the multiplier effect by reducing consumers' wealth and purchasing power
a. True
b. False
Indicate whether the statement is true or false
True
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“The market has failed to provide enough rental housing in New York City. This demonstrates another failure of free markets-they may lead to shortages of necessities.” Explain why you agree or disagree.
What will be an ideal response?
Refer to Figure 8.6, which shows just three of a firm's various possible short-run average cost curves. Suppose the firm is currently producing 160 units at an average cost of $90 per unit. Which of the following statements is true?
A. The firm could reduce its short-run average cost by producing more output.
B. The firm could reduce its short-run average cost by producing less output.
C. The firm is producing the level of output that minimizes short-run average cost.
D. The firm is producing its output at the lowest possible long-run average cost.
Suppose coal is mined at a zero marginal cost and is priced competitively. If the price of coal is growing faster than the interest rate, then coal miners
a. are making positive economic profits. b. will increase the amount of coal left unmined. c. should extract more coal now and less coal in the future. d. will exit the industry in the long run.
Expansionary fiscal policy is used to
A. make businesses more efficient. B. encourage private saving. C. flight inflation. D. fight recessions.