What causes inflation?
A. An increase in nominal GDP.
B. An increase in real interest rates.
C. An increase in the money supply.
D. An increase in real GDP.
Ans: C. An increase in the money supply.
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According to this Application, growth in China and India caused U.S. exports to increase. Because of this increase in U.S. exports, U.S. income will
A) increase by the same amount. B) increase by a larger amount. C) decrease by a larger amount. D) decrease by the same amount.
If education produces positive externalities and the government does not intervene in the market, we would expect
a. the market equilibrium price to be higher than the efficient equilibrium price b. the market equilibrium quantity to be lower than the efficient equilibrium output level. c. the market equilibrium quantity to be higher than the efficient equilibrium output level. d. none of the above