What is the difference between inflation and deflation?
A) Inflation is a sustained decrease in the price level whereas deflation is a sustained increase in the price level.
B) Inflation is a sustained increase in the price level whereas deflation is a sustained decrease in the price level.
C) Inflation is a measure of relative prices whereas deflation is a sustained increase in the price level.
D) None of the above.
B
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Which of the following would reduce the money multiplier?
A) bank reductions in desired reserve holdings B) reducing the reserve ratio C) cash drains from banks D) bond purchases by the Fed
An efficient allocation of resources occurs when we
A) produce the goods and services that people need. B) cannot produce more of a good or service without giving up some other good or service that we value more highly. C) produce the goods and services that people want. D) cannot produce more of a good or service without giving up some other good or service that we need.
Other things equal, advances in technology make resources more productive
a. True b. False Indicate whether the statement is true or false
The OPEC production cuts of 1999-2000 increased energy prices and caused the aggregate supply curve to
a. shift outward. b. shift inward. c. become flatter. d. become steeper.