In 1964 and 1970, unemployment was about 5 percent. Inflation in 1964, however, was 2 percent, while in 1970 it was over 5 percent. What might explain this difference?
A. Expansionary monetary policy
B. An increase in expected inflation
C. Expansionary fiscal policy
D. An increase in labor productivity
Answer: B
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A) higher; higher B) lower; lower C) higher; lower D) lower; higher
OLI theory is a direct contradiction of trade theory, especially trade theory based on comparative advantage
Indicate whether the statement is true or false
What would best describe the international capital markets?
A) the market of exchange of bonds B) the market of exchange of stocks C) the market of exchange of real-estate D) the market in which residents of different countries trade assets E) the currency market
If a country wants to promote future growth, it should
A) produce more capital goods today. B) produce more consumer goods today. C) produce only economic goods. D) produce only needed goods.