In Figure 1 below if the economy were at Y1 then we would expect there to be:
A. a reduction in inventories.
B. an increase in inventories.
C. no change in inventories.
D. an increase in consumption spending.
A. a reduction in inventories.
Economics
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Deflation exists whenever: a. the overall price level falls
b. the overall price level rises. c. the economy experiences a contraction. d. the price of a good decreases.
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Expansionary monetary policy, by increasing the money supply, also increases interest rates and recessionary gaps.
a. true b. false
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Economics