The net result of deflation is to:
A. reduce the level of aggregate demand in the economy.
B. increase the level of aggregate demand in the economy.
C. be neutral and not affect the aggregate demand in the economy.
D. reduce the level of aggregate supply in the economy.
A. reduce the level of aggregate demand in the economy.
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Free riders often result in
A. overallocation of resources. B. competitive markets. C. scarcity of time. D. market failure.
Currently most developed countries meet or exceed the U.N.'s Millennium Aid Goal for donor country GDP.
Answer the following statement true (T) or false (F)
_______ economics is most closely associated with fighting recessions and depressions.
A. Classical B. Supply-side C. Keynesian D. Monetarist
Alex wants to borrow $1,000 from Kara. If he repays the loan in one year, Kara would require him to pay 5 percent interest on the loan. If Alex wants to repay the loan over three years, but Kara strongly prefers present to future consumption, we would
expect the interest rate on a three-year loan to be: A. lower than for a one-year loan. B. greater than for a one-year loan. C. the same as for a one-year loan. D. higher if Kara expected there to be no inflation over the loan repayment period.