Author Question: Deflation occurs when A) there is a sustained increase in the price level. B) there is a ... (Read 77 times)

mmm · **on:** Jun 29, 2018

Deflation occurs when

A) there is a sustained increase in the price level.
B) there is a one-time increase in the price level.
C) there is a decrease in the expected rate of inflation.
D) there is a decline in the price level.

Question 2

Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in

A) real GDP lower than what would occur if no policy had been pursued.
B) short-term interest rates higher than what would occur if no policy had been pursued.
C) unemployment rates higher than what would occur if no policy had been pursued.
D) inflation higher than what would occur if no policy had been pursued.