When the rate of monetary growth is less than the rate of growth of real GDP, most likely in the long run
A. the inflation rate will decrease every year until it reaches zero.
B. the deflation rate will decrease every year until the economy experiences inflation.
C. the average price level will tend to increase over time.
D. the average price level will tend to decrease over time.
D. the average price level will tend to decrease over time.
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Suppose the price of capital and labor remain constant. As a firm's expenditures for capital and labor increase, its isocost line
A) rotates outward on the Y-intercept. B) shifts in parallel to the original isocost line. C) rotates outward on the X-intercept. D) shifts out parallel to the original isocost line.
Which of the following statements about markets is false?
a. markets are used to allocate resources in market systems b. markets can vary in geographical size c. prices are used to allocate goods in markets d. markets are used to allocate resources in centrally-planned socialist economic systems e. supply and demand explains how prices are set in competitive markets
What does inflation do to the value of the oversimplified multiplier?
a. Inflation increases the value of the multiplier above the value of the oversimplified formula. b. Inflation does not change the value of the multiplier. c. Inflation decreases the value of the multiplier below the value of the oversimplified formula. d. Inflation increases the value of the multiplier unless the level of unemployment also rises.
All of the following are characteristics of perfect competition EXCEPT
A. homogeneous products. B. each firm is a price taker. C. a lack of barriers. D. product differentiation.