Refer to the diagram and assume that prices and wages are flexible both upward and downward in the economy. In the extended AD-AS model:
A. demand-pull inflation would involve a rightward shift of curve A, followed by a leftward shift of curve C.
B. cost-push inflation would involve a rightward shift of curve A, followed by a leftward shift of
curve C.
C. recession would involve a leftward shift of curve A, followed by a leftward shift of curve C.
D. recession would involve a rightward shift of curve D, followed by leftward shifts of curves A
and C.
A. demand-pull inflation would involve a rightward shift of curve A, followed by a leftward shift of curve C.
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Refer to Figure 11-4. Within a country, the impact of wars and revolutions and their subsequent destruction of capital is reflected in the per-worker production function in the figure above by a movement from
A) B to A. B) E to B. C) B to C. D) A to C.
In autarky, when a community maximizes its standard of living, its production point is
A) below the production possibility frontier. B) on the production possibility frontier. C) above the production possibility frontier. D) Can't tell without more information.
What is meant by the demand for money?
What will be an ideal response?
Answer the question on the basis of the following information: Only three goods are produced in an economy in the following amounts: A = 10, B = 30, C = 5. The current year per unit prices of these three goods are A = $2, B = $3, and C = $1. Refer to the above information. If the per unit prices of the three goods each were $1 in a base year used to construct a GDP price index, then the GDP price index in the current year is:
a) 205.5. b) 255.5. c) 39.3. d) 100.