Explain how an economy can experience long-run economic growth and deflation at the same time
What will be an ideal response?
If aggregate demand remains relatively constant during the growth periods, than as the LRAS supply curve shifts right, the new equilibrium point of AD and the LRAS curve will be lower, indicating deflation.
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The main reason that finished goods are scarce is that
A. raw material resources are scarce. B. factories are not operated efficiently. C. distribution systems are clogged. D. taxes are destroying work incentives. E. All of the responses are correct.
By far, the most frequently encountered price discrimination is the
A) first-degree price discrimination. B) second-degree price discrimination. C) third-degree price discrimination. D) fourth-degree price discrimination.
Supply describes how much of something producers:
A. are willing and able to buy under certain circumstances. B. want to sell under certain circumstances, although they may not be able to. C. are willing and able to offer for sale at varies prices under given circumstances. D. want to offer for sale under certain circumstances, although they may not be willing to.
When Fed Chairman Paul Volcker raised interest rates shortly after he became chairman in 1979, the effect was
A. an immediate and sharp decline in the value of the dollar. B. a decade of economic decline for the United States. C. a pair of severe recessions in 1980 and 1981-1982. D. a rapid increase in the inflation rate.