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11. Unsustained…… occurs when prices in the goods and services market are high relative to resource prices and other costs (a) economic recession (b) economic boom (c) inflation (d) deflation 12. Why do people hold M1? (a) To earn interest on their money (b) To carryout transactions (c) As a hedge against inflation (d) As a means to have enough liquid assets to buy bonds and other securities 13. Decreases in Aggregate Demand lead to …… and …. (a) boom, full employment (b) recession, cyclical unemployment (c) boom, cyclical unemployment (d) recession, full employment 14. The type of expectation that asserts that individuals make use of both present and past information to make future predictions is ……… expectation (a) rational (b) future (c) speculative (d) anticipated 15. …. in the exchange rate value of the nation’s currency will shift the Aggregate Demand curve inward. (a) Reduction (b) Shock (c) Increase (d) Boom
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