In the extended classical model, an unexpected decrease in aggregate demand would cause unanticipated inflation to be ________ and cyclical unemployment to be ________
A) positive; negative
B) positive; positive
C) negative; negative
D) negative; positive
D
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The figure above shows the price of a DVD player from 1996 to 2000. a. What type of graph is illustrated above? b. What is the trend in the price of a DVD player?
What will be an ideal response?
An increase in the supply of capital, which is a substitute to labor, will lead to a decrease in the demand for labor
Indicate whether the statement is true or false
If your income increases from $30,000 to $40,000 and your savings increases from $2,000 to $4,000 . your marginal propensity to save (MPS) is:
a. 0.2. b. 0.4. c. 0.5. d. 0.8. e. 1.0.
The interest rate on some Brazilian bank accounts is 700 percent per year. If you put 1 Brazilian real (Brazil's currency) in a bank today, it will be worth 8 reals next year! Why then don't we all wire our U.S. dollars to Brazilian banks? a. The Brazilian government keeps the exchange rate fixed during the year, which wipes out your financial gain
b. The Brazilian balance of payments becomes negative, which results in higher taxes, much of it from your financial gain. c. The U.S. government prohibits U.S. investment in foreign financial institutions. d. People engaging in arbitrage will quickly adjust the rates to make the Brazilian interest rate no more attractive than U.S. interest rates. e. The exchange rate reals per dollar adjusts during the year so that you are no better off once you convert your reals back into dollars.