Page 164 - Macroeconomics. book docx_Neat

A. GDP level

B. Difference between actual and potential output

C. Inflation

D. Employment

17. Stagflation means:

A. Inflation only

B. Unemployment only

C. Inflation and unemployment

D. Growth

18. Trade deficit occurs when:

A. Exports > Imports

B. Imports > Exports

C. Exports = Imports

D. No trade

19. IS curve slopes downward because:

A. Interest rate effect on investment

B. Income effect

C. Tax effect

D. Export effect

20. LM curve slopes upward because:

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