An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
You might also like to view...
Lauren and Katy each bought a new bike lock for $20. Both Lauren and Katy would have paid $25 for the lock. Katy's consumer surplus equaled
A) $10. B) $40. C) $5. D) $20. E) $50.
Refer to the information above. What is the level of consumption when the level of income equals 2000?
A) 600 B) 1000 C) 1600 D) 2000
Which of the following is true? a. Sometimes the Fed moves to partly offset or even neutralize the intended effects of fiscal policy changes
b. If a consensus was reached between fiscal and monetary policy makers, you would not expect contractionary fiscal policy and expansionary monetary policy to be adopted at the same time. c. If policymakers' timing is off, expansionary monetary policy could cause an inflation problem rather than reducing a high unemployment problem. d. All of the above are true
The distinction between productivity levels and productivity growth rates is theoretical and has no practical application.
Answer the following statement true (T) or false (F)