When a government prints money to finance its expenditures, it is likely to cause
A. reductions in the use of barter.
B. unemployment.
C. deflation.
D. inflation.
Answer: D
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The elasticity of supply for paintings by Monet is
A) perfectly elastic. B) perfectly inelastic. C) unit elastic. D) inelastic.
People have a strong incentive to form rational expectations because
A) they are guaranteed of success in the stock market. B) it is costly not to do so. C) it is costly to do so. D) everyone wants to be rational.
Suppose there is an unexpected increase in real interest rates. Using the AD/AS model, describe the effects of this policy in the long run and the short run, assuming everything else equal
If policymakers expand aggregate demand, then in the long run
a. prices will be higher and unemployment will be lower. b. prices will be higher and unemployment will be unchanged. c. prices and unemployment will be unchanged. d. None of the above is correct.