The term "stagflation" is used to define an economic situation where there are adverse supply shocks which cause a fall in output but with increasing price level.
Answer the following statement true (T) or false (F)
True
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For a given domestic and foreign price level, a decrease in the nominal exchange rate ________ the real exchange rate.
A. decreases B. increases C. offsets any change in D. may either increase or decrease
According to Okun's Law, the year-to-year change in the rate of unemployment is ________ if the annual growth rate of real GDP is 5%
A) -5% B) 5% C) 2% D) -1%
In the above figure, which wage rate will yield the highest wage rates for particular workers?
A) W1 B) W2 C) W3 D) W3 - W2
Economists believe that public debt
a. always promotes overconsumption b. promotes overconsumption if people view the government's liabilities as their own c. promotes overconsumption if people fail to view the government's liabilities as their own d. cannot promote overconsumption e. promotes underconsumption if people view the government's liabilities as their own