If severe demand-pull inflation was occurring in the economy, proper government policies would involve a government:
A. deficit, the purchase of securities in the open market, a higher discount rate, and higher
reserve requirements.
B. deficit, the sale of securities in the open market, a higher discount rate, and lower reserve
requirements.
C. surplus, the sale of securities in the open market, a higher discount rate, and higher
reserve requirements.
D. surplus, the purchase of securities in the open market, a lower discount rate, and lower
reserve requirements.
C. surplus, the sale of securities in the open market, a higher discount rate, and higher
reserve requirements
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If Slovenia is a small country in world trade terms, then if it imposes a large series of tariffs on many of its imports, this would
A) have no effect on its terms of trade. B) improve its terms of trade. C) deteriorate its terms of trade. D) decrease its marginal propensity to consume. E) increase its exports.
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Assume that a 4 percent decrease in income results in a 6 percent increase in the quantity demanded of a good. The income elasticity of demand for the good is
a. negative, and the good is an inferior good. b. negative, and the good is a normal good. c. positive, and the good is an inferior good. d. positive, and the good is a normal good.