Suppose a jar of DeLux popcorn that is ultimately sold to a customer at Friendly Groceries is produced by the following production process: Name of CompanyRevenuesCost of Purchased InputsFulton Family Farm$0.500DeLux Popcorn Co.$2.50$0.50Friendly Groceries$4.00$2.50 What is the sum of the value added of all of the firms?
A. $7.00
B. $3.00
C. $6.50
D. $4.00
Answer: D
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Starting from potential output, if consumer confidence decreases and consumers decide to spend less, then this will generate a(n) ________ gap and inflation will ________.
A. recessionary; increase B. expansionary; increase C. expansionary; decrease D. recessionary; decrease
Higher gasoline prices would likely raise the price of large, gas-guzzling automobiles
a. True b. False Indicate whether the statement is true or false
An example of in-kind income is: a. a welfare payment
b. a cash grant. c. a housing subsidy. d. an unemployment check.
When neo-Keynesians looked at 1970s–1980s inflation and unemployment data, they found
a. not a single Phillips curve, but a set of Phillips curves b. a relatively well-behaved downward-sloping Phillips curve c. a vertical Phillips curve, which helped to explain stagflation d. a Phillips curve that was very similar to the Phillips curve of the 1960s e. a Phillips curve that behaved like a Laffer curve