Graphically, demand-pull inflation is shown as a:
A. rightward shift of the AD curve along an upsloping AS curve.
B. leftward shift of the AS curve along a downsloping AD curve.
C. leftward shift of the AS curve along an upsloping AD curve.
D. rightward shift of the AD curve along a downsloping AS curve.
A. rightward shift of the AD curve along an upsloping AS curve.
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Use the figure below to answer the following question.
If actual production and consumption occur at Q1
A. there is deadweight loss of b + d. B. there is deadweight loss of e + d. C. economic surplus is maximized. D. consumer surplus is maximized.
If the growth rate of nominal GDP and the rate of inflation in an economy are 4% and 1% respectively, the growth rate of real GDP in the economy must be:
A) 4%. B) 1%. C) 3%. D) 5%.
It is likely that a constitutional amendment that required the government always to run a balanced budget would
a. contribute to a more stable level of output. b. mitigate the crowding-out effect. c. eliminate the economy's automatic stabilizers. d. All of the above are correct.
The components of M2 that are not also in M1:
A. sum to an amount that is smaller than the sum of the components of M1. B. are usable for making payments, but at a greater cost or inconvenience than currency or checks. C. are not usable for making payments. D. pay lower rates of interest than do the components of M1.