A favorable balance of trade occurs when
a. merchandise exports are greater than merchandise imports
b. merchandise imports are greater than merchandise exports
c. international trade is an increasing share of total output
d. the balance on capital account equals the balance on current account
e. unilateral transfers are positive
A
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Cost-push inflation is
A) inflation caused by decreases in aggregate supply that generate an even larger decrease in aggregate demand. B) inflation caused by increases in aggregate demand that are not matched by increases in aggregate supply. C) inflation caused by increases in aggregate demand that generate an even larger increase in aggregate supply. D) inflation caused by decreases in aggregate supply that are not matched by decreases in aggregate demand.
According to the quantity theory of money, if the money supply grows at 6%, real GDP grows at 2%, and the velocity of money is constant, then the inflation rate will be
A) 8%. B) 6%. C) 4%. D) 2%.