Which of the following would most likely occur if the federal government increased its spending and enlarged the size of the budget deficit during a period of full employment?
a. The rate of inflation would decline.
b. The r ate of inflation would rise.
c. A recession would develop.
d. Interest rates would fall.
b
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A profit-maximizing firm will continue to expand output
a. as long as the revenues from the production and sale of an additional unit exceeds the average costs of the unit. b. until the average cost of producing the good or service is at a minimum. c. as long as the revenues from the production and sale of an additional unit exceeds the marginal cost of the unit. d. until the marginal cost of producing a good or service is at a minimum.
Using a graph, explain both the substitution effect and income effect that result from an increase in the price of a normal good.
What will be an ideal response?
Which of the following statements is false?
A) The Treasury bond information published under the column heading "Yield" is based on the ask price of the bond. B) The Treasury bond information published under the column heading "Yield" is based on the assumption that the bond is held to maturity. C) The Treasury bond information published under the column heading "Bid" indicates the price a buyer will pay if he buys the bond. D) The Treasury bond information published under the column heading "Bid" is the price a buyer will receive if she sells the bond.
In a ________, the amount of output that any one household gets depends on its income and wealth.
A. socialist economy B. command system C. free-market system D. Marxist economy