The self-correcting tendency of the economy means that recessionary gaps are eventually eliminated by: a. rising inflation b.increasing potential output c.government policy. d.decreasing potential output. e. falling inflation.

Q: What is the difference between a recession and a depression? A. A depression is the opposite of a…

A: Business cycle refers to the fluctuations in economic activity. It includes expansion and recession.…

Q: Inflation rate is showing the rising price level of the economy. There are two causes of inflation,…

A: Meaning of Inflation: The term inflation refers to the situation under which there is an excessive…

Q: 1) Answer these three sub-parts a) If an economy’s price level increases from year to year, its…

A: In economics, there is believed to be a direct relationship between the nominal money supply level…

Q: 15) The primary goal of effective macroeconomic policies is to reduce ________. a. Inflation b.…

A: Inflation is the situation when the prices of products of daily use will rise in the market.

Q: Contrast demand-pull and bottleneck inflation.

A: When there is an increase in the price of a product, it is known as. Inflation in economics terms.…

Q: 4-) Question: The . real interest rate will be greater than the . Real interest rate when the - rate…

A: Inflation refers to the situation of increasing price level in the economy. The ex-post real…

Q: A10  Philip Cross: The government is driving inflation 1. Fiscal stimulus 2. Passing the costs on to…

A: When there is a rise in the interest rate then it makes borrowing expensive. This discourages…

Q: 8. Inflation-induced tax distortions - USE 2 DECIMAL PLACES IN ANSWERS Edison receives a portion of…

A: * ANSWER :-

Q: True or False : 1.A stronger value for dollar boosts exports and restrains imports with…

A: Since you have asked multiple question, we will solve the first question for you. If you want any…

Q: 10, Explain why extending unemployment insurance benefits has both a supply-side and demand side…

A: A government program that provides support to unemployed individuals in the form of income…

Q: Choose the statement that does not describe Microeconomics. a. The effect of increasing the money…

A: Economics is the study of allocating the scarce resources efficiently and effectively. The three…

Q: b) What information does the sacrifice ratio tell us about the consequences of reducing inflation?

A: since you have asked multiple questions and according to policy we can solve only 1 question and for…

Q: edule of the aggregate demand stipulated that ------ and inflation is connected with ------- output?…

A: The aggregate demand schedule shows the total quantity of goods and services which an economy…

Q: 6. There was an unexpected burst of inflation in the late 70s and early 80s that is sometimes called…

A: The interest rate in economics is the amount of payment that a lender charges on a borrower in order…

Q: the government wants to reduce unemployment, government spending should be---      and/or taxes…

A: *Answer:  increased; decreased The increase government spending increases jobs and decreases in…

Q: 7. The government can lower inflation with a low sacrifice ratio if the: a. money supply is reduced…

A: The sacrifice ratio shows what proportion state is caused within the economy with a 1 percent…

Q: . In macroeconomic, How expectations can play a role in shaping both consumption behavior and…

A: Consumer expectations are important because they impact buying decisions and help to determine…

Q: 11. Inflation and unemployment Suppose that the government believes the economy is producing goods…

A: The demand side of monetary strategy is monetary policy, which refers to the measures taken by a…

Q: 8. Inflation-induced tax distortions Musashi receives a portion of his income from his holdings of…

A: Nominal interest rate is the interest rate calculated without taking inflation into account. Real…

Q: 5. Inflation and the quantity theory: Suppose velocity is constant, the growth rate of real GDP is…

A: Ans in step 2

Q: 4. Now assume we advocate a Keynesian narrative of the economy. Furthermore, prices and wage rates…

A: Keynes argued due to rigidity prices and wages do not change quickly.

Q: 4 If inflation is so easy to explain, why do policymakers sometimes have trouble ridding the economy…

A: Inflation basically refers to increase in the price of goods and commodity during a specific period…

Q: 8. Inflation-induced tax distortions Musashi receives a portion of his income from his holdings of…

A: According to Fisher Equation : Nominal Interest Rates = Inflation + Real Interest Rates  Therefore ,…

Q: 3. Activists and nonactivists both believe that Group of answer choices -the self-corrective…

A: Activists and nonactivists both believe that: Macro-policy should seek to minimize economic…

Q: 13. If decision makers adjust fully to demand stimulus policies, persistent expansionary…

A: The expansionary macroeconomic policies are an attempt to boost aggregate demand, increase output,…

Q: 12. Inflation-induced tax distortions Bob receives a portion of his income from his holdings of…

A: We can calculate nominal interest rates as, Nominal Interest Rate=Inflation+Real Interest Rate

Q: 1. a. Assume the nominal interest rate is 12 percent and the expected rate of inflation is 8…

A: 1.a. Given that, Nominal interest rate = 12% or 0.12 Expected rate of inflation = 8% or 0.08

Q: uppose that government decides to support the firms for their investments in research and the…

A: Since you have asked for multiple questions, we have answered the first question for you. If you…

Q: Refer to the table below. Real Output Demanded, Original, Real Output Supplied, Billions Billions…

A: Answer: (a). If the real output demand increases by $11 billion at each price level then the real…

Q: 6. Classify each of the following statements as positive ornormative. Explain.a. Society faces a…

A: Since we only answer up to 3 sub-parts, we’ll answer the first 3. Please resubmit the question and…

Q: Find and describe an inflation contemporary issue of supply and demand into three paragraphs with…

A: Demand and supply In an economy there is always a demand for goods and services and the supply of…

Q: How can fiscal policy tools be used to address the problem of inflation? Please provide two real…

A: Fiscal policy is the process through which a government modifies its spending and tax rates in order…

Q: 1. If the economy currently has a frictional unemployment rate of 2 percent, structural unemployment…

A: The natural rate of unemployment. Answer: The main types of unemployment include the cyclical,…

Q: [18] Which of A-C is a true statement? A. Without fear of contradiction it can be said that FDR’s…

A: Great Depression: It refers to a situation under which the whole economies faced economic depression…

Q: 8. Inflation-induced tax distortions Shen receives a portion of his income from his holdings of…

A: