Author Question: Suppose that the rest of the world experiences an economic boom causing an increase in foreign ... (Read 83 times)

imowrer · **on:** Jun 30, 2018

Suppose that the rest of the world experiences an economic boom causing an increase in foreign output (Y). This increase in Y will not cause which of the following to occur?

A) the domestic country's output to increase
B) the domestic country's consumption to increase
C) the domestic country's output to increase and its trade balance to worsen as imports increase
D) all of the above
E) none of the above

Question 2

Which of the following situations generally exists when deflation occurs?

A) Inflation and unemployment are both increasing.
B) Inflation and unemployment are both decreasing.
C) The price level is decreasing.
D) The rate of inflation is falling from, for example, 10 to 3.
E) The natural rate of unemployment is zero.