According to Keynes, why might deflation create problems for an economy?
A. People would drop out of unions because unions would become ineffective at keeping wages of members high.
B. Consumers might expect prices to fall further and cut back consumption now.
C. In expectation of increased spending, too many entrepreneurs would begin businesses and most would fail.
D. Producers might increase production to take advantage of falling input prices.
Answer: B
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Which of the following statements best describes relative inflation?
a. If the currency of the country Currencia is experiencing relatively low inflation, then its buying power is decreasing and international investors will be less eager to hold it. b. If the currency of the country Currencia is experiencing relatively high inflation, then its buying power is increasing and international investors will be less eager to hold it. c. If the currency of the country Currencia is experiencing relatively high inflation, then its buying power is decreasing and international investors will be less eager to hold it. d. If the currency of the country Currencia is experiencing relatively high inflation, then its buying power is increasing and international investors will be less eager to hold it.
Medical care spending escalates as an individual reaches old age. Which of the following statements is true regarding medical care spending and the elderly?
a. Most of the medical care cost explosion is due to the high cost of treating the elderly. b. The easy way to control end-of-life spending is to limit use of all but the most cost-effective care to those over the age of 65. c. The real reason for the increase in medical spending among the elderly is the increase in chronic illnesses as we age and the multiplicity of services available to treat those illnesses. d. The high cost of acute care spending for the elderly is a major contributing factor in the increase in medical spending.
What causes a decrease in income in this graph?
a. The total of areas d + f is less than the total of areas e + d.
b. The total of areas d + f is more than the total of areas e + d.
c. The total of areas e + f is less than the total of areas e + d.
d. The total of areas e + f is more than the total of areas e + d.
Perfect competition is a market structure
A) in which any firm would have serious impediments to entry or exit. B) in which individual buyers and sellers have no effect on the market price. C) resulting from individual firms selling highly differentiated products. D) where there is significant regulation and markets are always efficient.