An inflationary spiral can emerge when

A. Desired spending at full employment falls short of full-employment output.
B. Actual investment equals desired investment.
C. An increase in investment exceeds available savings.
D. Desired leakages exceed desired injections.


Answer: C

Economics

You might also like to view...

The equilibrium quantity in the above figure is

A) 200 units. B) 300 units. C) 400 units. D) 600 units.

Economics

Explain why in situations where the Coase Theorem applies, bargaining power does not influence whether the efficient outcome is reached, but affects the distribution of gains

What will be an ideal response?

Economics

The ________ of a coupon bond and the yield to maturity are inversely related

A) price B) par value C) maturity date D) term

Economics

Exchange-rate targeting allows a central bank to ________, thus this will ________ the probability of policy developing a time-inconsistency problem

A) be governed by a policy rule; decrease B) follow discretionary policy; decrease C) be governed by a policy rule; increase D) follow discretionary policy; increase

Economics