A consequence of an inflationary gap is ____ as output begins to decrease and prices continue to increase.
A. stagflation
B. reflation
C. disinflation
D. perflation
Answer: A
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If the demand curve for X has twice the elasticity of the demand curve for Y, then for the same percentage decrease in price, the percentage increase in the quantity of X demanded would be twice that for Y
a. True b. False Indicate whether the statement is true or false
Which furniture production process would have the highest wage rates?
a. furniture made by handsaw and hammer b. furniture made with power equipment c. furniture made by grade school-educated workers d. furniture made in an automated furniture factory
The main reason that firms adjust their output when the price level changes is that
a. uncertainty causes a drop in output. b. taxes cause a supply-side reaction. c. their profit margins change. d. increased risks lead to a change in output. e. All of the above are correct.
During a period of rapid economic expansion an economy might experience
A. increased transfer payments. B. reduced tax revenues. C. demand-pull inflation. D. low levels of employment.