Cost-push inflation happens when technological innovation unexpectedly lowers the cost of production, causing increased demand for goods and services
a. True
b. False
Indicate whether the statement is true or false
False
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In the early 1800s, there was a smallpox outbreak in a remote part of Russia. The government sent in a large group of army doctors, but they were too late to stop the epidemic. Thirty years later, there was another smallpox scare. A local statistician cautioned the government against a similar response, noting the increased mortality and high number of army doctors during the earlier epidemic. Was the statistician providing good advice?
What will be an ideal response?
The shorter is the interval between firms' price adjustments,
A) a given unexpected increase in aggregate demand will cause a larger increase in output. B) the greater is the scope for activist policies to stabilize the economy. C) the smaller is the scope for activist policies to stabilize the economy. D) a given unexpected increase in aggregate demand will cause a smaller increase in the price level in the short run.
If real GDP and the velocity of circulation do not change and the quantity of money grows by 3 percent, then in the long the inflation rate is
A) 0 percent. B) 3 percent. C) larger than 3 percent. D) -3 percent. E) More information is needed to answer the question.
By vertically integrating, two firms can
A) increase market share. B) avoid holdup problems. C) limit the problems inherent in moving too quickly. D) avoid antitrust issues.