In the Full Employment and Balanced Growth Act of 1978, price stability means that
A. Inflation is less than 3 percent per year.
B. The inflation rate is the same each year.
C. Inflation is less than 5 percent per year.
D. There is zero inflation each year.
Answer: A
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If Argentina has a large amount of farmland and Great Britain has many factories,
a. the two nations have no reason to trade. b. Argentina will be willing to trade but Great Britain will not. c. Great Britain will be willing to trade but Argentina will not. d. the two nations will probably engage in mutually advantageous trade.
An improvement in consumer confidence will cause:
A. A movement down the aggregate demand curve. B. The aggregate supply curve to shift to the right. C. The aggregate demand curve to shift to the right. D. The aggregate demand curve to shift to the left.
Ricardian Equivalence theory is based on the view that ________
A) the impact of a tax cut is felt primarily on domestic consumption spending B) households tend to take future events into account when engaging in economic decision-making C) the price of a commodity is negatively related to the quantity of that good demanded D) a trade-off exists between the use of monetary and fiscal policy in influencing the level of income
Exhibit 15-6 Aggregate demand and supply model
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In Exhibit 15-6, if the aggregate demand curve is at AD1, in order to reach the full-employment levl of GDP the government should:
A. raise taxes to move to AD2. B. cut taxes to move to AD2. C. cut taxes to move to AD3. D. cut spending to move to AD2.