Expansionary fiscal policy to prevent real GDP from falling below potential real GDP would cause the inflation rate to be ________ and real GDP to be ________
A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower
Answer: A
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A supply curve describes
a. the relationship between price and quantity demanded b. the relationship between price and quantity supplied c. the relationship between a group of buyers and sellers d. none of the above
If the CPI rose from 200 in 1992 to 260 in 1996, by what percentage did prices increase?
What will be an ideal response?
Suppose we observe that as a firm increases its price its total revenue decreases. Which of the following is a possible value of its price elasticity of demand?
A. 0.25 B. 0.5 C. 1 D. 2
Which of the following would provide the best evidence that a commodity is being produced under conditions of perfect competition?
A) The supply curve is perfectly inelastic. B) The demand curve facing any one producer is perfectly elastic. C) The production of the commodity is large. D) The profits of producers are low.