Real income measures the
A) slope of the budget line.
B) purchasing power of a given income.
C) slope of the preference map.
D) area under the indifference curve.
B
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The term "stagflation" is used to define an economic situation where there are adverse supply shocks which cause a fall in output but with increasing price level
Indicate whether the statement is true or false
The relationship according to which the perceived change in any stimulus varies according to the size of the change measured as a proportion of the original stimulus is known as:
A. the Weber-Fechner law. B. the representative heuristic. C. status quo bias. D. regression to the mean.
________ is an increase in the price level, while ________ is an increase in the price of one good in comparison to other goods and services.
A. Hyperinflation; inflation B. Inflation; hyperinflation C. Inflation; a relative price increase D. A relative price increase; inflation
Why do governments in less-developed nations impose tariffs?
A) The nation's total income will be increased. B) The government gains revenue from the tariff. C) The government diversifies its economy. D) The national security of the country definitely is improved. E) The government's low-paid workers are protected from high-paid foreign workers.