The price-elasticity of demand is always negative because of:

Which one of the following is TRUE in an open economy with a government sector?

A) The equilibrium level of real GDP occurs when total planned real expenditures equal real GDP. B) The equilibrium level of real GDP occurs when planned real investment spending is zero. C) The equilibrium level of real GDP occurs when planned real saving equals government spending. D) The equilibrium level of real GDP occurs when real net export spending equals zero.

Stagflation occurs when inflation ________ and GDP ________

A) rises; falls B) falls; rises C) falls; falls D) rises; rises