The production possibilities frontier has a tendency to bow outward from the origin.
Answer the following statement true (T) or false (F)
True
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Ceteris paribus, if bond prices rise, then
A) there is no effect on bond yields. B) bond yields will increase as well. C) bond yields will fall D) the Federal reserve must be pursuing contractionary monetary policy.
An upward-sloping line or curve is used to illustrate:
a. a direct relationship. b. an inverse relationship. c. two unrelated variables. d. the ceteris paribus assumption.
When a government intentionally lowers the value of its currency, that is called depreciation
a. True b. False Indicate whether the statement is true or false