When the Price Level Is Rising And, Simultaneously, Real GDP

question 16

Multiple Choice

When the price level is rising and, simultaneously, real GDP is decreasing,

• A)the natural unemployment rate is rising.
• B)the natural unemployment rate is falling.
• C)stagflation is occurring.
• D)the economy is experiencing an expansionary gap.
• E)potential GDP is decreasing.

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Definitions:

Civil Liberties

Fundamental rights and freedoms that are protected from infringement by the government, such as freedom of speech, privacy, and equal rights.

Espionage Act

A United States federal law passed in 1917 that was aimed at preventing interference with military operations, supporting enemy nations, and promoting insubordination in the military.

First Amendment

An amendment to the United States Constitution that guarantees freedoms concerning religion, expression, assembly, and the right to petition.

American Civil Liberties Union

Organization founded during World War Ⅰ to protest the suppression of freedom of expression in wartime; played a major role in court cases that achieved judicial recognition of Americans’ civil liberties.