Dave's Uncle Tells Dave That If "He Feels That Dave

question 45

Multiple Choice

Dave's uncle tells Dave that if "he feels that Dave deserves it," he will give Dave $1,000 when Dave graduates from college. Dave's uncle's promise is

• A)illusory.
• B)enforceable.
• C)a forbearance.
• D)a preexisting duty.

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Definitions:

Potential Output

The optimum level of real gross domestic product achievable over a prolonged period without triggering higher inflation.

Expected Inflation Rate

The rate at which the general level of prices for goods and services is rising, and, subsequently, purchasing power is falling, as anticipated by consumers and businesses.

Short-run Phillips Curve

A curve illustrating the short-term trade-off between inflation and unemployment, suggesting that lower unemployment in an economy can lead to higher inflation rates.

Aggregate Demand Curve

A graphical representation that shows the relationship between the overall price level and the total demand for goods and services in an economy.