If people become pessimistic about the state of the economy, the consumption function shifts downward
a. True
b. False
Indicate whether the statement is true or false
True
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Which of the following can start an inflation?
A) an increase in aggregate demand B) an increase in aggregate supply C) a decrease in aggregate supply D) Both answers A and C are correct. E) Answers A, B, and C are correct.
If inflation is much higher than originally anticipated, _____ are better off and _____ are worse off
a. lenders who extended loans at fixed interest rates; people who borrowed at fixed interest rates b. people who borrowed at fixed interest rates; banks that extended loans at fixed interest rates c. retired people living on a fixed income; people who had borrowed fixed interest rate loans d. people who deposited their savings at fixed interest rates; banks that accepted deposits at fixed interest rates e. oil refiners who signed labor contracts agreeing to pay their workers the cost-of-living wage; workers who receive that cost-of-living wage
The problem with a detailed budget is:
a. that monetary policy becomes more difficult to implement. b. that it reduces the flexibility of discretionary fiscal policy. c. that the Congress cannot keep it up to date. d. that there is a shortage of congressional committees which deal with the budget.
The "expansion" of an economy occurs after:
A. firms produce more goods. B. people spend more money. C. a trough. D. an inflationary period.