On a Phillips curve diagram, a decrease in the rate of inflation, other things being equal, is represented by a(n):
A. upward shift of the Phillips curve.
B. downward movement along Phillips curve.
C. upward movement along the Phillips curve.
D. downward shift of the Phillips curve.
Answer: B
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If a higher inflation is expected, what would you expect to happen to the shape of the yield curve? Why?
What will be an ideal response?
The internal rate of return is likely to lead to incorrect decisions.
A. True B. False C. Uncertain
As the price level decreases, the value of money
a. increases, so people must hold less money to purchase goods and services. b. increases, so people must hold more money to purchase goods and services. c. decreases, so people must hold more money to purchase goods and services. d. decreases, so people must hold less money to purchase goods and services.
When comparing a? $100 billion increase in government expenditure to a? $100 billion decrease in tax? revenue, the effect of the increase in government expenditure on aggregate demand is
A) greater than the effect of the tax decrease.
B) equal to the effect of the tax decrease.
C) less than the effect of the tax decrease.
D) positive whereas the effect of the tax decrease is negative.
E) negative whereas the effect of the tax decrease is positive.