Inflation is problematic if
a. it is less than the percentage increase in nominal income.
b. it is less than the nominal return on saving.
c. it equals the growth rate of real GDP in the long run.
d. it distorts relative prices, causing a misallocation of resources.
d
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If the U.S. price level increases relative to price levels in foreign countries, _____
a. the aggregate supply curve for the U.S. will shift outward and the aggregate demand curve would remain unchanged b. the aggregate supply curve for the U.S. will shift inward and the aggregate demand curve would remain unchanged c. the aggregate demand curve for the U.S. will shift outward and the aggregate supply curve would remain unchanged d. the aggregate demand curve for the U.S. will shift inward and the aggregate supply curve would remain unchanged e. both the aggregate demand and the aggregate supply curves for the U.S. will shift outward
Explain how a small amount of international debt can become a very heavy burden for a developing economy