One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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When a monopoly price discriminates, it
A) increases the amount of consumer surplus. B) decreases its economic profit. C) converts consumer surplus into economic profit. D) converts economic profit into consumer surplus. E) has no effect on the deadweight loss in the market.
Central banks get the purchasing power to buy foreign exchange by:
a. Buying government securities. b. Taking loans from the government. c. Increasing their liabilities in the form of deposits from banks. d. Actually, they are not able to buy or sell foreign exchange.
If the government wanted to encourage home? ownership, it? could:
A. make mortgage interest tax deductible. B. add a? 10% surcharge on every home purchase. C. tax homeowners based on asset values. D. None of the above.
Labor unions are groups of:
A. employees who petition the government to oversee the employment conditions of employees who work for major corporations. B. employers who join together to create fair employment packages for employees within a certain geographical area. C. employers who petition the government to regulate the safety conditions of certain industries. D. employees who join together to bargain with their employer(s) over salaries and work conditions.