Figure 33-8
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In Figure 33-8, which of the following movements illustrates the response of the economy to a stimulation of aggregate demand when workers systematically underpredict inflation?
A. C to A
B. C to B
C. C to D
D. C to E
Answer: A
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A. marginal profit will be zero. B. marginal profit will be negative. C. marginal profit will be positive. D. MR > MC.
A game of incomplete information is distinct from one of complete information in that players:
a. do not observe each others' actions. b. do not know each others' payoff functions. c. do not know the timing of moves. d. use mixed strategies.
Inflation caused by an increase in aggregate spending is referred to as:
a. Hyperinflation b. Demand-push inflation c. Cost-push inflation d. Demand-pull inflation
The official settlements balance is the sum of the nonofficial financial account balance and the public current account balance.
Answer the following statement true (T) or false (F)