Unpredictable inflation can cause businesses to:

A. increase production due to expecting future price level changes.
B. restrict output and stockpile inventory.
C. have a hard time planning future production.
D. cease production until they know how to adjust for inflation.

Answer: C

Economics

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Other things remaining the same, an increase in nominal GDP causes the velocity of money to:

a. Rise. b. Fall. c. Not change.

Economics

Suppose that we reduce the federal budget deficit (in billions of dollars) in year 1 from 300 to 150 and in year 2 from 150 to 50. During these two years the national debt will

A. fall by 50. B. rise by 50. C. rise by 150. D. rise by 200.

Economics