Under a gold standard, a discovery of gold will
a. decrease the general price level.
b. increase the general price level.
c. cause increased unemployment.
d. cause decreased rates of economic growth.
b
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To determine whether the goal of stable prices is being achieved, the Federal Reserve monitors
A) the core PCE deflator inflation rate. B) the core GDP deflator inflation rate. C) the GDP price deflator. D) the producer price index. E) the CPI.
Why is it possible that the economy will not self-correct out of a recessionary gap?
Economists normally assume people's preferences should be
a. respected. b. adjusted. c. overruled. d. ignored.
When people make decisions that go against their own interests, neoclassical economics explains this to be instances where people are:
A. Intentionally not maximizing their net benefit B. Ignorant of what their best interests are C. Simply incapable of making rational decisions D. Behaving quite rationally