Which of the following tend to gain when inflation exists?
(a) Savers.
(b) Those investing in cash.
(c) Those on fixed incomes.
(d) Borrowers.
Answer: (d) Borrowers
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Governments sometime create an excess supply of a product by setting a minimum price that is greater than the equilibrium price, resulting in a permanent excess supply of the product. This is known as a price ceiling
Indicate whether the statement is true or false
Congress is debating whether to raise taxes by $100 billion or decrease spending by $100 billion in order to eliminate a budget deficit. Which action will have the larger effect on equilibrium GDP?
a. the increase in taxes b. the decrease in spending c. the effects will be equal d. not possible to determine without knowing the multiplier
Which of the following is infrastructure?
a. Training and education b. Police c. Highways d. All of the answers are correct.
The base year is the year
A) in which prices are unstable. B) in which prices are lowest. C) in which prices are highest. D) that serves as a reference point or benchmark. E) in which nominal output is largest.