Usually, increased government spending for war increases inflationary pressures. The principal reason that inflation occurred during the Vietnam War and not during World War II was the existence, during World War II, of
A. full employment.
B. government ownership of factories.
C. full production.
D. wage and price controls.
E. high levels of patriotism.
Answer: D
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A principal-agent problem occurs when
a. people are "fooled" by high absolute wages offered by employers. b. insurance increases people's willingness to take risks. c. an employer cannot fully monitor the employee's work. d. a highly productive worker is unable to earn any rent.
The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Which of the following is the best example of a disruptive market change related to international trade?
a. a domestic manufacturer opens a new state-of-the-art facility in the home country b. an international manufacturer opens a new state-of-the-art facility in the home country c. an international manufacturer develops a completely robotic manufacturing process d. a domestic manufacturer replaces one international supplier with another international supplier
Macroeconomics differs from microeconomics in that macroeconomics focuses on:
A. individual choices and group behavior in individual markets. B. production in specific markets. C. prices in specific markets. D. the performance of national economies and ways to improve that performance.