An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.

What are sources that can start a demand-pull inflation?

What will be an ideal response?

The cost of holding money balances increases when

a. the purchasing power of money rises. b. the money interest rate increases. c. the price of goods and services falls. d. consumer income expands.