The reason why inflation reduces the value of the multiplier is that part of the change in demand is
a. absorbed by price changes.
b. saved rather than spent.
c. matched by changes in supply.
d. matched by changes in income.
a
Economics
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Macroeconomists are interested in how consumers respond to changes in the market real interest rate because
A) interest rates are an important channel for the effects of monetary and fiscal policies. B) substitution effects and income effects net out in the aggregate. C) of the permanent income hypothesis. D) future income affects current consumption.
Economics
When U.S. computer companies hire workers in India to staff their customer service call centers, they are engaging in
A) predatory pricing. B) unfair trade practices. C) outsourcing. D) labor engagement.
Economics