Deflation is defined as a situation in which
A) the rate of inflation is below 2 percent.
B) the average of all prices of goods and services in an economy is falling.
C) the value of the dollar is rising relative to other currencies.
D) the Gross Domestic Product's growth rate is less for a given quarter than it was for the prior quarter.
B
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According to the misperceptions theory, short-lived shocks may have long-term effects on the economy because of
A) multiplier effects. B) propagation mechanisms. C) accelerator effects. D) automatic stabilizers.
Which of the following could lead to a rightward shift of the demand curve for a good?
a. a decrease in the price of a substitute good b. an increase in the price of a complementary good c. a decrease in the price of the good, assuming it is a normal good d. an increase in the price of the good, assuming it is an inferior good e. expectations that the price of the good will rise in the future