Other things equal, an increase in aggregate spending tends to be associated with:
a. cost-push inflation.
b. an economic depression.
c. a lower level of equilibrium real GDP.
d. demand-pull inflation.
e. an increase in the quality of goods and services produced.
d
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When the real interest rate increases
A) the supply of loanable funds curve shifts rightward. B) the supply of loanable funds curve shifts leftward. C) there is a movement upward along the supply of loanable funds curve. D) there is a movement downward along the supply of loanable funds curve.
Suppose one is offered a gamble in which you win $1,000 half the time but lose $1,000 half the time. Since in this case one is as likely to win as to lose the $1,000, the average payoff on this gamble—its expected value—is:
0.5 ? $1,000 + 0.5 ? (-$1,000 ) = 0. Under such circumstances: A) no one will take the gamble. B) risk averse individuals will take the gamble. C) risk lovers individuals will not take the gamble. D) risk neutral individuals will not take the gamble. E) risk lovers and risk neutral individuals may take the gamble.