Deflation is particularly bad for an economy in recession for all of the following reasons EXCEPT a-with deflation people spend less  expecting prices to be lower in the future b- the rising prices makes goods more expensive c- with deflation the value of assets declines while the value of loans does not - this lowers wealth and further depresses spending

Q: Evaluate (explain the positives and negatives of) expansions in the econohmy. What is happening with…

A: Expansions in the economy refer to the rise in the level of economic activity and the availability…

Q: The following data are the seasonally adjusted percent changes from the preceding month for the…

A: Core CPI helps to measure inflation in an economy by taking into consideration the inflation of all…

Q: When a nominal value increases it must be true that prices have increased. Select one: True False

A: Nominal value: face value of an asset or security.

Q: A recession is a decline in    the inflation rate that lasts six months or longer the unemployment…

A: The economic activities are the activities which need to be efficient in functioning so that they…

Q: when does an economy experiences stagflation

A: Government and central bank control the financial and economic functioning of a particular economy.…

Q: The CPI in Mexico has been increasing consistently recently.  A change in expectations that reflects…

A: Consumer price index (CPI) refers to the measurement of weighted average price of the consumption of…

Q: Based on the articles “Unemployment Claims Remain Historically High” and “US Consumer Spending Rose…

A: Unemployment refers to a situation where a person is willing to work but he/she doesn't get…

Q: During a recession: O potential GDP declines potential GDP increases real GDP declines

A: Gross Domestic Product (GDP) is the total value for final commodities manufactured in an economy.

Q: Stagflation is a combination of: a) increasing unemployment and increasing inflation b) decreasing…

A: Stagflation is an economic condition with persistent high inflation combined with high levels of…

Q: Deflation refers to a situation where price level falls price level rises the rate of inflation…

A: Deflation is one of the components of the business cycle. The business cycle refers to those…

Q: Which of the following is not included in aggregate demand?     A. purchases of services such as…

A: Aggregate demand is the total amount of spending on the final goods and services in the economy.…

Q: A recession can be defined as:

A: A recession is a significant, widespread, and prolonged decline in economic activity. It is…

Q: Which one of the following is most likely to cause stagflation? Group of answer choices An increase…

A: Stagflation is a scenario characterized via a mixture of stagnant economic growth, excessive…

Q: Analyse the impact of these events on the price level and total output of an economy in the short…

A: a) When the government increases the expenditure on health and education, the demand would increase…

Q: When Full employment GDP is less than equilibrium GDP, the economy faces A) Recession B) Inflation…

A: Full employment refers to the economic situation where all the labor resources in the economy are…

Q: Assume that nominal income increases by 5% and the price level increases by 3%, which of the…

A: Nominal income does not take into account inflation.

Q: During recessions, income a) falls and unemployment rises b) and unemployment both fall c) rises and…

A: Recession is a situation in which economic activities of a country falls.

Q: Since 1950, expansions in the United States have become ________, while recessions have become…

A: Recession: It is a macroeconomic term that alludes to a critical decrease in all financial movement…

Q: An overheated economy is most likely to result in: price stability high inflation stagflation…

A: A country's economy often overheats when supply is less than the demand. The price of goods and…

Q: Calculate the rate of inflation when the Consumer Price Index went from 200 to 208.  Of the 200…

A: “Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: There are two theories regarding the cause of recessions. Between the two, which one contributes…

A: Recession: It refers to the situation under which the people do not get work to do. The recession is…

Q: Which of the following refers to the decrease in the general price level of goods and services in an…

A: In economics, different terms describe changes in the general price level of goods and services,…

Q: How does an overheated economy affect wages? They rise much more steeply than usual. They decline at…

A: Overheating of an economy usually takes place when the demand exceeds the supply. This leads to…

Q: A rise in the price level means a: Group of answer choices lower value of goods lower value of money…

A: The economies tend to focus on their growth, and development, where various parties in the economy…

Q: Recessions can be caused by  a) a decrease in Aggregate Demand ONLY b) an increase in Aggregate…

A: Recession: It means a contraction in a business cycle when an economy decline generally.

Q: When a nominal value is unchanged it must be true that prices have remained unchanged. Select one:…

A: Introduction: Nominal Value: It is the value or price of the commodity that does not include…

Q: The index of the general price level can be seen in two distinct ways. What are these two…

A: Economics as a subject deals with the allocation of scarce resources among humans with unlimited…

Q: The measure that summarizes the aggregate price level is: O a price index. a consumption bundle. the…

A: Answer: (a)

Q: Following a demand-side recession, what happens to full employment GDP (C+I+G) after a few…

A: When talking about demand-side recession, it is the situation when people reduces their demand for…

Q: Why is stagflation particularly damaging for an economy? Lowered competition for jobs hurts…

A: Stagflation refers to the ccombination of stagnation alomg with inflation in the economy which does…

Q: According to graph1 why and how a decrease in the blue line could cause a decrease in the orange…

A: Based on Graph 1, a decrease in the blue line (S&P/Case-Shiller U.S. National Home Price Index)…

Q: Economists use the phrase "business cycle" when referring to fluctuations in

A: Gross domestic product (GDP) is the total monetary or market value of all the finished goods and…

Q: During the Great Recession of 2008, many workers became discouraged and dropped out of the labor…

A: Labor force is a sum of people unemployed and people employed.

Q: Which of the following is not seen by economists as an underlying cause of business cycle…

A: The business cycle, also known as the economic cycle, refers to the fluctuations of economic…

Q: According to the Austrian theory of the business cycle, the following is false A. A cluster of…

A:

Q: f the current unemployment rate is 8% and the natural rate of unemployment is 6%, what do we know…

A: The natural rate of unemployment is the lowest level of unemployment that an economy can sustain…

Q: Mary has been out of the paid workforce in order to raise her children. Now she decides to do paid…

A: A person is defined as a person who is of working age and is willing and able to work but could not…