An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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Your friend has just received a new book he ordered and you want to borrow it. Your friend values reading the book at $10, while you are willing to pay a maximum amount of $15 to read it
a) What is the equilibrium outcome in this case? b) Will the outcome be any different if you own a book that your friend wants to read? Assume that the value that each of you places on this book is the same as that you placed on the previous book.
Given the scenario described, if the market price of hammers increased from $8 to $11:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. A. total producer surplus would increase to $5. B. total producer surplus would decrease to $1. C. total producer surplus would increase to $17. D. total producer surplus would decrease to $7.
Distinguish between scarcity and shortage
An appreciation in the U.S. dollar on the foreign exchange market will
What will be an ideal response?