Refer to the information provided in Figure 2.4 below to answer the question(s) that follow. Figure 2.4According to Figure 2.4, as the economy moves from Point B to Point D, the opportunity cost of motorcycles, measured in terms of hybrid cars,

Which of the following is not a consequence of deflation?

A. Deflation causes uncertainty about the future. B. The threat of deflation can make people reluctant to borrow for long periods. C. Deflation causes the real value of money to fall. D. Firms may be reluctant to undertake investments for fear that the prices at which they can sell their output will drop.

You are given the following information on the various sectors of the economy. Derive the aggregate expenditure function

C = 100 + 0.75Y I = 200 + 0.20Y G = 500 X = 250 M = 100 + 0.10Y