For deflation to occur,
A) national income must decrease.
B) real GDP must decrease.
C) the price level must decrease.
D) nominal GDP must decrease.
C
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You are the chairperson of the Board of Governors of the Federal Reserve. You believe in a Keynesian model of the economy, and your goal is to keep the economy at the full-employment level of output
How would you respond (tightening or easing policy) in each of the following cases? (a) Government purchases increase (b) Corporate tax rates increase (c) Expected inflation increases (d) There's a beneficial oil price shock (and the LM curve shifts more to the right than the FE line)
Suppose researchers discover that a government program to match job seekers and employers has caused an increase in the unemployment rate. Does this mean that the program has failed?
What will be an ideal response?