An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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Which of the following statements is FALSE?
A) saving = disposable income - consumption B) consumption + saving = disposable income C) consumption = saving - disposable income D) disposable income - saving = consumption
In recent years new automobile factories have opened in California and Ohio and closed in Detroit where the unemployment of automobile workers has increased. This unemployment could be decreased if
A) "moving costs" from Detroit to California and Ohio were reduced. B) information about the new jobs was made available to the unemployed workers at reduced cost. C) workers with the appropriate skills were relatively scarce in Ohio and California. D) all of the above.
Which of the following is a distinctive feature of a credit-driven asset-price bubble?
A) asset-price increases that are "justified" by projections of future value B) a weakening of lending standards C) an increase in the number and variety of market participants D) The affected assets are financial stocks or bonds issued by companies in the financial sector.
Demand-pull inflation starts as the...
What will be an ideal response?