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

Economics

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What will be the effects of a severe Florida freeze on the price of orange-juice-concentrate futures and what will occur as a result?

A) The futures price will fall and less orange juice will be consumed currently. B) The futures price will fall and more orange juice will be consumed currently. C) The futures price will rise and less orange juice will be consumed currently. D) The futures price will rise and more orange juice will be consumed currently.

Economics

Fixed costs are best defined as:

a. costs that do not vary with output. b. costs that are at a minimum when output approaches the firm's capacity. c. the amount that one more unit of output adds to total costs. d. costs that decline as output increases.

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Goods which are demanded to produce something else are said to have a(n):

a. direct demand. b. composite demand. c. derived demand. d. joint demand. e. inelastic demand.

Economics

According to the long-run Phillips curve, which of the following will be the end result of an expansionary monetary policy when unemployment is at its natural rate?

a. Zero inflation b. Deflation c. A constant level of potential real GDP d. A decrease in unemployment e. An increase in unemployment

Economics