Refer to the information provided in Figure 27.4 below to answer the question(s) that follow.
Figure 27.4Refer to Figure 27.4. Higher price levels coupled with lower output are the result of
A. economic growth.
B. deflationary growth.
C. stagflation.
D. deflation.
Answer: C
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Ted got a ticket to this year’s Super Bowl and paid the face value of $1,000. His cousin offered him $3,000 for the ticket. Ted chose to attend the game. From this, we can infer that Ted’s value for this ticket was
A. less than $1,000. B. more than $2,000. C. at least $3,000. D. the ticket price plus his cousin’s offer, a total of $4,000.
Suppose the government of a country wants to increase the aggregate demand of its economy by $10 billion at all price levels. However, it currently has a balanced budget with no surplus and is unwilling to borrow money to finance fiscal policy. The government could still accomplish its goal by increasing government purchases by ________ and increasing taxes by $10 billion.
A. $20 billion. B. $10 billion C. $15 billion. D. $5 billion
A firm has successfully adopted a positive technological change when
A) it can produce more output using the same inputs. B) it sees an increase in worker productivity. C) it produces less pollution in its production process. D) it can pay its workers less yet increase its output.