In the simple Keynesian model,
A. Inflation is a problem whenever demand increases.
B. Inflation is a problem whenever demand decreases.
C. Inflation becomes a problem only if demand increases at full employment.
D. Inflation is never a problem.
Answer: C
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A) policies that influence the rate of growth of the quantity of money in circulation. B) changing taxes. C) changing government spending. D) policies that influence aggregate demand.
If a nation opens up to free trade and becomes an importer of goods, which of the following is then true?
A) The nation as a whole loses. B) Sellers gain. C) Buyers gain. D) Buyers lose.
The production function Q = 0.8X + 0.6Y exhibits
A) increasing return to scale. B) decreasing returns to scale. C) constant returns to scale. D) economies of scale.
The future value of $1 saved today is $1/(1 + r)
a. True b. False Indicate whether the statement is true or false