Deflation:
a. is often a result of increases in the money supply.
b. is good for borrowers, but bad for lenders.
c. is good for lenders, but bad for borrowers.
d. cannot occur under a bimetallic standard.
c. is good for lenders, but bad for borrowers.
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The percentage rate of change in the price level is called the
A) Consumer Price Index. B) rate of inflation. C) chain-weighted price index. D) rate of absorption.
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?
A) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease. B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease. C) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease. D) The price would decrease, the demand would increase, and the supply would decrease.