What is stagflation, and how does it occur? How is stagflation represented in the aggregate demand-aggregate supply model?
What will be an ideal response?
Stagflation refers to a combination of high inflation and recession, usually resulting from a negative aggregate supply shock such as an increase in the price of oil. In the aggregate demand-aggregate supply model, stagflation is represented by a leftward shift of the aggregate supply curve.
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In our modern financial system, money is created
A) only by central banks. B) only by the banking system. C) by central banks and the banking system. D) only by federal governments.
Suppose there are four firms in a market and each of them sell differentiated products. Does it make sense for these firms to engage in a price war? Why or why not?
What will be an ideal response?
Suppose the reserve requirement is 10 percent and a person deposits $1,500 in a local bank. The local bank can now create a maximum of:
a. $150 in additional money, by lending $150. b. $15,000 in additional money, by lending $15,000. c. $1,500 in additional money, by lending $1,500. d. $1,350 in additional money, by lending $1,350. e. $135 in additional money, by lending $135.
Three uses of gdp data
What will be an ideal response?