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6. Low inflation is also know as…
- Price stability
- Price control
- Inflation
- Recession
- Price instability
- price convergence
- Price deflation
7. Inflation is widely regarded as an important issue for macroeconomic policy-makers because inflation…
- Can cause widrer economic costs lncluding slower growth
- Allows savers to improve their standard of living
- Allows producers to make higher profits each year
- Increases the return on business investments
8. A possible concern for businesses if deflation occurs is that:
- Banks will increase interest rates
- Consumers may postpone spending decisions
- Raw material will become more expensive
- The value of stocks will rise
9. Which one of the following would NOT be a possible cause of cost-plus inflation
- Increased supply in raw material markets
- Growth in factory wages
- Commodity price increases
- A weaker exchange rate
10. Deflation describes a period in the economy when
- The value of an exchange rate is falling
- The average level of prices is falling
- Economic growth is falling
- The rate of growth in prices is slowing