One In the News article titled "Everything Is on Sale and That's Not Good" suggests that deflation
A. Harms economic growth due to lower profits, more layoffs, and less spending that create a self-reinforcing cycle.
B. Harms the economy because bankruptcies decrease.
C. Results in higher interest rates that further slow the economy.
D. Harms sellers only, but not buyers since they get better deals without worries of job losses.
Answer: A
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If expansionary fiscal policies in theUS lead to increased budget deficits what will happen to real interest rates in the US and the value of the dollar?
a. increase; increase b. increase; decrease c. no change; decrease d. decrease; increase e. decrease; decrease
Dell and Gateway must decide whether to lower their prices, based on the potential economic profits shown in the payoff matrix above. (The profits are in millions of dollars). In the Nash equilibrium
A) Dell keeps its prices high and Gateway lowers its prices. B) both Dell and Gateway lower prices. C) Gateway keeps its prices high and Dell lowers its prices. D) both Dell and Gateway keep prices high.