Economists generally assume that there is a short-run trade-off between
A. output and employment.
B. inflation and employment.
C. deflation and unemployment.
D. inflation and unemployment.
E. output and growth.
Answer: D
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M1: The most narrowly defined money supply. It includes
In the standard consumption function of C = a + bY, the MPC is
A) Y. B) bY. C) a. D) b.
Many governments actively work to:
A. attract foreign direct investment, hoping it will build up their capital stock when domestic savings aren't sufficient. B. attract foreign direct investment, so that when foreign companies invest in local firms, they can transfer human capital to local managers. C. discourage foreign direct investment, in an effort to encourage locals to invest in their own economy. D. discourage foreign direct investment, in an effort to avoid "crowding out."
A government currently uses price controls to hold down the price of zinc, an exhaustible resource. If price controls are removed,
a. production of zinc will probably fall. b. zinc mines with high marginal cost of production will probably stop producing. c. consumers of zinc will probably want substitutes for zinc. d. income will probably be redistributed from zinc producers to zinc consumers.