In an economy where actual real GDP is always equal to the natural real GDP, inflation
A) settles down to zero percent.
B) is at the same rate as GDP growth.
C) is constant at a rate that can be low or high.
D) fluctuates around an average of zero percent.
C
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Large firms are able to lower their costs by taking advantage of ___________________.
Fill in the blank(s) with the appropriate word(s).
The exchange rate can be influenced by a nation's central bank
Indicate whether the statement is true or false
Keynes argued that when interest rates were low relative to some normal value, people would expect bond prices to ________ so the quantity of money demanded would ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Along any IS curve
a. both government spending and expectations are fixed. b. government spending and the price level may vary. c. consumption and the price level are fixed. d. both government spending and tax rates may vary. e. all of the above