The reason that stagflation tends to follow an inflationary gap is that
A. output tends to fall even as prices continue to rise as part of the self-correcting mechanism.
B. government officials tend to overact in controlling inflation.
C. businesses try to increase profits by raising prices and increasing output.
D. workers accept pay cuts to maintain employment.
Answer: A
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The majority of funding for 19th century American canal building came from
a. the federal government. b. state governments. c. local governments. d. private investors.
Absolute advantage is based on opportunity cost
a. True b. False
The opportunity cost of a two-week vacation in Hawaii for an Arizona resident includes: a. the cost of the beach resort hotel accommodations
b. the airfare to and from Honolulu International Airport. c. the time that could have been used to travel somewhere else. d. all of the above.
A transfer payment is
a. income that is received but not earned b. income that is earned but not received c. included in GDP to account for the spending on capital depreciation d. part of personal disposable income but not personal income e. always equal to the taxes that the government collects