When the value of money falls as a result of a rapid increase in its supply, ________ occurs.
A. negative exchange
B. currency debasement
C. deflation
D. all of the above
Answer: B
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Suppose that there are two factors, capital and land, and that the United States is relatively capital abundant while Canada is relatively land abundant. According to the HO model,
A) Canadian landowners should support Canada-U.S. free trade. B) Canadian capital owners should oppose Canada-U.S. free trade. C) U.S. capital owners should support Canada-U.S. free trade. D) All of the above.
A vertical Phillips Curve is consistent with
A) a constant price level. B) constant velocity. C) an upward sloping aggregate supply curve. D) a vertical aggregate supply curve.
The reason why weaker firms accept price leadership is that they
a. maximize profit that way b. get an equal share of the market c. can collude to eventually challenge the dominant firm d. are protected from price competition e. can lower their prices to increase market share without upsetting the price leader
What is the shape of the demand curve faced by the perfectly competitive firm, and why?
What will be an ideal response?