The reason that stagflation tends to follow an inflationary gap is that
a. output tends to fall even as prices continue to rise as part of the self-correcting mechanism.
b. government officials tend to overact in controlling inflation.
c. businesses try to increase profits by raising prices and increasing output.
d. workers accept pay cuts to maintain employment.
a
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Your bank has the following balance sheet Assets Liabilities Rate-sensitive $100 million Rate-sensitive $75 million Fixed-rate 100 million Fixed-rate 125 million What would happen to bank profits if the interest rates in the economy go down
? Is there anything that you could do to keep your bank from being so vulnerable to interest rate movements?
Savings that pay for capital investment can come from:
A. outside a country. B. within a country. C. domestic savings. D. All of these are true.