Which of the following statements best describes relative inflation?
a. If the country Economia experiences a relatively low inflation rate compared with other economies, then the buying power of its currency is eroding, which will tend to discourage anyone from wanting to acquire or to hold the currency.
b. If the country Economia experiences a relatively high inflation rate compared with other economies, then the buying power of its currency is eroding, which will tend to discourage anyone from wanting to acquire or to hold the currency.
c. If the country Economia experiences a relatively high inflation rate compared with other economies, then the buying power of its currency is increasing, which will tend to discourage anyone from wanting to acquire or to hold the currency.
d. If the country Economia experiences a relatively low inflation rate compared with other economies, then the buying power of its currency is increasing, which will tend to discourage anyone from wanting to acquire or to hold the currency.
b. If the country Economia experiences a relatively high inflation rate compared with other economies, then the buying power of its currency is eroding, which will tend to discourage anyone from wanting to acquire or to hold the currency.
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Lower real income ________ the demand for money and a lower price level ________ the demand for money.
A. decreases; decreases B. increases; increases C. increases; does not change D. increases; decreases
Whenever total planned expenditures differ from real GDP
A) unplanned inventories will remain unchanged. B) government spending will adjust. C) tax revenues will move the economy back to equilibrium. D) unplanned inventories will change.
According to economist Paul Romer, economies seeking high economic growth must
A. encourage consumption by households. B. drastically lower their standards of living. C. invest in knowledge. D. reduce their population growth by adopting a one-child policy.
Which of the following policies tends to cause the dollar to appreciate?
A. a combination of an expansionary monetary policy and a contractionary fiscal policy B. an expansionary fiscal policy C. a contractionary fiscal policy D. an expansionary monetary policy