According to the concept of rational expectations
a. budget deficits are irrelevant to output in the short-run.
b. higher deficits should increase output in the short-run if they are expected.
c. lower deficits can be used to stabilize output during expansions.
d. none of the above.
A
Economics
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When a lender underestimates the rate of inflation,
a. purchasing power is redistributed to the lender. b. purchasing power is redistributed to the borrower. c. the real rate of interest will be higher than expected. d. the nominal interest rate was set too low.
Economics
Many economists describe the 2007-2009 period in the United States as being a condition of a(n)
a. deflationary gap. b. recessionary gap. c. inflationary gap. d. reflationary gap.
Economics