The Canadian govt can reduce national dent by an interest and inflation policy which keeps the rate of inflation above the rate of interest. True/False/Uncertain.
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- . “Persistent budget deficits always lead to higher inflation.”Is this statement true, false, or uncertain? Explain youranswerAssuming prices and output are somewhat flexible, an increase in consumer spending will cause inflation to __________ in the short run and growth to ___________ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease uncertain/decreaseEffectiveness of anti-inflationary policies in conditions of adverse supply shocks.
- The cost of inflation reduction is a large, permanent increase in unemployment. true or falseAn added benefit of inflation is that it allows for the possibility of a. menu costs. b. aggregate supply shocks. c. negative real interest rates. d.recessions.In order to manipulate the inflation rate in the United States, the Federal Reserve lowers the federal funds rate. What will occur as a result? Select all that apply.
- Assuming prices and output are somewhat flexible, a decrease in investment will cause inflation to __________ in the short run and growth to ___________ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease remain unchanged/decreaseInflation targets are usually specified as a. a range for the inflation rate. b. a specific inflation rate target, for example, 1 percent. c. deviations from the inflation rate. d. the short-term interest rate rate minus 2 percent.Assuming prices and output are somewhat flexible, an increase in worthless government spending will cause inflation to __________ in the short run and growth to ___________ in the short run. increase/decrease increase/increase decrease/increase decrease/decrease remain unchanged/remain unchanged
- A stable inflation rate is necessary to forecast business activities and make better investment decisions. * True or false?Expectations of inflation are ____________ effective than/as actual inflation in ____________ production costs. a) less; increasing b) less; decreasing c) as; increasing d) as; decreasing e) more; increasingThe simple solution to fighting inflation is reducing the growth rate of the money supply true False