A major element of the concepts of inflation and deflation is
A. each household's willingness to report what they pay for goods and services each month.
B. the idea that price changes are measured daily.
C. their dependence on average rather than individual prices.
D. the requirement that ALL prices must be moving in the same direction.
Answer: C
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Classical economists think that the government ________ use fiscal policy to dampen the business cycle because prices and wages adjust ________
A) should not; rapidly B) should not; slowly C) should; slowly D) should; rapidly
Under laissez faire, the allocation of scarce resources among the different industries
a. is possible only with government tax and subsidy policies. b. is accomplished by the price system. c. requires a considerable amount of central planning. d. is the result of consumer planning.
A main cause of the cost disease of personal services is
a. the change from an agrarian to an industrial society. b. labor-saving innovations in the service industries. c. the unevenness in growth of productivity in the economy. d. massive increases in industrial production at the expense of consumer goods production.
Macroeconomics differs from microeconomics in that:
A. macroeconomics is the study of individual markets, while microeconomics deals with the nation's economy as a whole. B. microeconomics is the study of individual markets, while macroeconomics deals with the nation's economy as a whole. C. macroeconomics focuses principally on social and political issues, while microeconomics involves the study of a nation's monetary system. D. microeconomics focuses principally on social and political issues, while macroeconomics involves the study of a nation's monetary system.