If the price of a bond increases, the interest rate (or rate of return on the bond) decreases

All of the following are symptoms of definite and identifiable macroeconomic imbalances EXCEPT

A) large budget deficits. B) an overvalued currency. C) a current account deficit. D) the discovery of emerging markets by financial investors who want to diversify their portfolios.

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