Which of the following can create demand-pull inflation?
a. Excessive aggregate spending.
b. Sharply rising oil prices.
c. Higher labor costs.
d. Recessions and depressions.
a
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In the Classical view, falling interest rates increase
A) government spending. B) saving. C) velocity. D) investment.
The circular flow model primarily studies how decisions are made by what two groups?
a. consumers and suppliers b. households and firms c. government and households d. government and firms
Which of the following can make it very difficult for monetary policy to address a recession?
a. velocity b. inflation c. deflation d. aggregate demand
The multiplier effect occurs because
A. as saving levels increase, a greater pool of loanable funds is available for investment spending by businesses. B. increases in income cause a chain reaction of spending by many businesses and individuals. C. increases in income cause tax revenues to increase, thereby stimulating increases in government spending levels. D. businesses copy the spending decisions of their competitors. E. households tend to spend any increase in income.