Economic stagnation coupled with high inflation is commonly called:
A. stagflation.
B. inflationary stagnation.
C. stagnatory growth.
D. inflagnation.
Answer: A
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Consider a short-run equilibrium in a perfectly competitive market. Suppose that the firms' average total cost and marginal cost schedules differ. In the short run,
A) all firms in the market must be able to make an economic profit. B) all firms produce equal amounts of output. C) some firms might incur an economic loss, but still produce output. D) some firms might make an economic profit and, as a result, shut down. E) all firms in the market must be able to make either positive or zero economic profit.
The multiplier is equal to
a. the reciprocal of MPC. b. the reciprocal of MPS. c. MPC + MPS. d. MPC/MPS.
The marginal propensity to consume is:
A. the change in consumer spending minus the change in aggregate disposable income. B. the change in consumer spending divided by the change in aggregate disposable income. C. the proportion of total disposable income that the average family consumes. D. increasing if the marginal propensity to save is increasing.
High and unexpected inflation has a greater cost
a. for those who save than for those who borrow. b. for those who hold a little money than for those who hold a lot of money. c. for those whose wages increase by as much as inflation than those who are paid a fixed nominal wage. d. for savers in low income tax brackets than for savers in high income tax brackets.