Stagflation is a period of time when the economy is experiencing:
a. inflation and low unemployment.
b. high unemployment and low levels of inflation at the same time.
c. high inflation and high unemployment at the same time.
d. low inflation and low unemployment at the same time.
QUESTION 2Speculative demand for money is a(n):
a. positive function of prices.
b. inverse function of prices.
c. positive function of interest rates.
d. inverse function of interest rates.
e. function of unexpected needs.
QUESTION 3The phase in the business cycle in which real GDP declines is called a:
a. trendline.
b. peak.
c. recession.
d. recovery.
e. trough.
QUESTION 4The concurrent problems of inflation and unemployment are termed:
a. depression.
b. downturn.
c. deflation.
d. demand-pull inflation.
e. stagflation.
QUESTION 5The speculative demand for money:
a. varies inversely with income.
b. is only concerned with active money.
c. involves holding money for unexpected problems.
d. varies directly with the transactions demand for money.
e. varies inversely with the interest rate.
QUESTION 6The business cycle consists of four phases. At the top we have:
a. expansion, followed by peak, and then recession followed by a recession.
b. expansion, followed by a recession, and then peak followed by recession.
c. peak, then an upturn followed by a recession, and then recession.
d. peak, then a recession followed by expansion, and then recession.
e. peak, then a recession followed by recession, and finally, expansion.
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