A situation in which output decreases while prices increase is often referred to as:
A. inflation.
B. negative economic growth.
C. a recession.
D. stagflation.
Answer: D
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How do your authors explain the vast differences between the growth rates of the United States and India?
A) The tremendous degree of central planning in the United States B) Exploitation of the poorer nation by the richer nation C) The problems of central planning in India D) The lack of central planning in India E) The strength of the union movement in the United States
When an economy is operating on its production possibilities curve, more production of one good means less production of another because:
a. resources are limited. b. resources are not perfectly adaptable to alternative uses. c. wants are limited. d. wants are unlimited. e. some resources are not employed.
If Pat's income increased from $250,000 to $500,000 and his consumption increased from $200,000 to $300,000, what was his marginal propensity to consume?
a. 0.4 b. 0.6 c. 0.8 d. 0.9
All of the following are shortcomings of GDP as a measure to human well-being except it:
a. Excludes non-market transactions. b. Excludes international transactions. c. Excludes black market and underground transactions. d. Excludes quality improvements that do not increase price or quantity sold. e. Excludes the value of leisure time.