When two people trade their initial endowments to a point on the contract curve, only the level of the endowments will determine the new allocation
Indicate whether the statement is true or false
False. The respective bargaining abilities will also play a role in determining the final allocation.
Economics
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If a contractionary monetary policy lowers the price level by more than expected, it raises the real value of consumer debt. This reduces consumer expenditure through
A) the bank lending channel. B) Tobin's q. C) the traditional interest-rate channel. D) the household liquidity effect.
Economics
An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Economics