Figure 10-11
In , which of the following would most likely cause the movement from point E1 to point E2?
a.
an increase in the expected inflation rate
b.
a decrease in the expected inflation rate
c.
a major technological advance
d.
a temporary reduction in oil prices
c
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Firms engage in explicit collusion when:
A. they predict what the other will do and attempt to undercut them. B. they collude without communicating, sustaining a price above the noncooperative price that would arise in a single competitive interaction. C. they communicate to reach an agreement about the prices they will charge. D. they communicate what type of good they will produce.
An example of an external force in business fluctuations is
a. falling interest rates due to lagging demand in a contraction. b. a devaluation in the nation’s currency. c. variations in inventories. d. the lag between price changes and cost changes.
Monetary and price instability will
a. make it easier for both individuals and businesses to plan wisely for the future. b. generate uncertainty, and encourage investors and businesses to move their activities to countries with a more stable monetary environment. c. encourage businesses to invest and expand their future output. d. encourage domestic citizens to increase their rate of saving.
Countries with more economic freedom during 1980-2010 tended to
a. grow more rapidly, but the 2010 income levels of the freer economies were still lower than those that were less free. b. achieve higher levels of income but the growth rates of the less free economies have been more rapid in recent years. c. achieve both more rapid growth and higher income levels than those that were less free. d. grow less rapidly and the 2010 income levels of the freer economies were lower than those that were less free.