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Homework answers / question archive / The inflation rate will be zero when prices are increasing at a constant rate
The inflation rate
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will be zero when prices are increasing at a constant rate. |
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is equal to the price level. |
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is the annual rate of increase in the price level. |
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is always increasing when the overall price level is increasing. |
which policy would have been the most sucessful when dealing with fiscal policy
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Government spending was increased with the economy at full employment |
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The government purposely increased spending during a recession |
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Taxes were raised during recessions |
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When efforts were made to eliminate a budget deficit during a recession |
The difference between real and nominal income or GDP arises because of the presence of ________.
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The difference between report and actual corporate profit |
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People that do not report all their earnings |
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Inflation |
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Difference in values of currencies |
1. is the annual rate of increase in the price level.
Explanation: Inflation is the increase in the price level over a period of time.
2. The government purposely increased spending during a recession
Explanation: During a recession the government can increase spending and cut taxes to stimulate the economy and raise output.
3. Inflation
Explanation: Because of inflation, the general price level changes. So, there is a difference between real and nominal variables.
