One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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Under what condition can the U.S. government continue to pay interest on a rising debt without eventually needing to increase the average tax rate?
a. If the national debt grows at the same rate as nominal GDP b. If the nominal interest on the national debt grows faster than nominal GDP c. If the total interest payments on the national debt grow faster than nominal GDP d. If the national debt grows faster than nominal GDP e. If the real interest on the national debt grows faster than real GDP
How much the quantity of a good traded changes after a shift of the supply curve depends on
a. the size of the shift. b. the slope of the demand curve. c. whether the market is subject to price controls. d. All of the above are correct.
An initial increase in aggregate demand that is NOT followed by an increase in the quantity of money results in a long-run equilibrium with...
What will be an ideal response?
Refer to the diagram below. If box E represents government, box C businesses, box D the resource market, and box B the product market, then government purchases of computers, office supplies, and military hardware would be illustrated by arrows:
A. 5 and 6
B. 7 and 8
C. 9 and 10
D. 10 and 11