An economy in which output has decreased and prices have increased would suggest that there has been a:
A. negative demand side shock.
B. negative supply side shock.
C. positive demand side shock.
D. positive supply side shock.
Answer: B
You might also like to view...
What does a household's budget line show?
What will be an ideal response?
If the Fed does not take into account the additional policy channels available in an open economy, then ________ when conducting contractionary monetary policy
A) it is likely to increase GDP too little and cause a recession B) it is likely to decrease GDP too little and inflation will persist C) it is likely to decrease GDP too much and cause a recession D) it is likely to increase GDP too much and inflation will persist
If the Federal Reserve's goal is to stabilize aggregate demand, then it will _____ the money supply in response to a stock market boom. This causes interest rates to _____
Fill in the blank(s) with correct word
Post-World War II inflation rates, as measured by the CPI
a) are overestimated due to the inability to measure quality improvements b) are underestimated due to the exclusion of import prices c) are not comparable across decades due to decennial changes in the base year d) have tended to move in the opposite direction of inflation rates as measured by the GDP deflator e) have become increasingly accurate as technology has improved