In the 1970s and 1980s the U.S. dollar depreciated against the German mark and appreciated against the Italian lira because U.S. inflation was lower than in Germany but higher than in Italy
a. True
b. False
Indicate whether the statement is true or false
False
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Why does the Fed attempt to achieve a low, stable rate of inflation rather than an inflation rate of 0%?
What will be an ideal response?
The market demand curve is the sum of individual quantities demanded at each price
a. True b. False
A tax of $1 on buyers always decreases the equilibrium price by $1
a. True b. False Indicate whether the statement is true or false