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1 . As long as we recognize that by inflation we mean a ……… .. and...

1 .

As long as we recognize that by inflation we mean a ……… .. and ……… .. increase in the price level.

Please choose one:

a. Sticky - flexible

b. Sudden –sharp

c. Continually - slow

D. Rapid - Continually

2 .

Expansionary fiscal policy means a rise in taxes; raises equilibrium output and also raises the interest rate.

Select one of them:

Right

False

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Answer #1

1) inflation is normally of continuous and slow increase in the price level. Inflation is generally defined as the general increase in the price level of the goods and services in the economy.

As long as we recognise that by information we mean a continually and slow increase in the price level.

Hence, option c is correct.

2) FALSE. Expansionary fiscal policy does not mean a rise in taxes. Expansionary fiscal policy means a decrease in taxes. decrease in taxes leads to an increase in disposable income of the consumers increasing the consumption expenditure and equilibrium output. Expansionary fiscal policy also increases the interest rate.

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