Stagflation occurs when inflation ________ and GDP ________
A) rises; falls B) falls; rises C) falls; falls D) rises; rises
A
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The demand for firewood is likely to be more elastic in the summer than in the winter
a. True b. False
Based on the rising housing prices of 2000-2005, many buyers opted for interest-only loans and variable rate mortgages with little or no down payment because
a. they expected short-term interest rates to fall substantially in the future and this would reduce their monthly mortgage payment in the years ahead. b. variable rate mortgages are a good way to reduce the risk accompanying your investment when you plan to stay in the house for a long time. c. they thought housing prices would continue to rise and therefore they would be able to sell the house for a profit within a couple of years. d. they could easily recoup their investment, even if there was a downturn in housing prices in the future.