To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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When personal savings rates are ________, it takes ________ change in government purchases to have a given amount of impact of real GDP.
A. higher; more B. unstable; less C. unstable; more D. higher; less
Economics studies the consequences of
A) choices made by individuals. B) choices made by businesses. C) choices made by governments. D) choices made by society. E) choices made by the entire planet earth.
If velocity is a constant, then the equation of exchange is an economic model
a. True b. False Indicate whether the statement is true or false
The demand for euros would come from
a. American exports to Europe. b. European demand for U.S. government bonds. c. American demand for European real estate. d. All of the above are correct.