The individual's budget constraint is _____
a. the amount of money she has in the bank
b. determined by dividing the individuals income by the price of the goods she wants to buy
c. the maximum amount one good she can consume given her consumption of other goods
d. a line depicting all the possible budgets an individual could have at various occupations
c
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A financial crisis may develop into a vicious cycle due to:
a. a recession that worsens banking problems. b. increased net capital inflows due to the crisis. c. exchange rate depreciation that increases output. d. banks becoming more liberal in granting loans.
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