Demand-pull inflation is due to:
A. minimum wage laws.
B. labor cost increases.
C. excess total spending.
D. tax increase.
Answer: C
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Foreign exchange reserves are critical to an effective floating exchange rate system
Indicate whether the statement is true or false
If the government owes $15.0 trillion and then borrows $900 billion more this year, this leads to
a. a debt of $900 billion and a deficit of $15.9 trillion. b. a debt of $15.9 trillion and a deficit of $900 billion. c. a debt of $14.1 trillion and a deficit of $900 billion. d. a debt of $15.0 trillion and a deficit of $14.1 trillion. e. a debt of $15.9 trillion and a deficit of zero.
A favorable supply shock
a. raises unemployment and the inflation rate. b. raises unemployment and reduces the inflation rate. c. reduces unemployment and raises the inflation rate. d. reduces unemployment and the inflation rate.
When a country is producing goods and services efficiently it:
A. is getting the most output by using all its available resources. B. is producing at a point on or below its production possibilities frontier. C. is able to reach a point beyond its production possibilities frontier. D. has unemployed workers.