An advantage of set-aside programs over price support programs is that they
A. Transfer more income to farmers.
B. Raise the price of agricultural production but do not lead to a surplus of output.
C. Reduce the price of agricultural goods.
D. Affect the demand side as well as the supply side of the farm problem.
Answer: B
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The price of apples increases from $1 to $1.10. At the same time, the quantity of apples demanded decreases from 100 to 90. The price elasticity of demand for apples (calculated using the initial value formula) is __________ .
A. 0.02 B. 0.9 C. 1 D. 1.1
The natural rate hypothesis concludes that the inflation rate increases, then in the short run there is
A) a downward movement along the short-run Phillips curve. B) an upward movement along the short-run Phillips curve. C) no change at all in the short-run Phillips curve. D) an upward shift of the short-run Phillips curve. E) a downward shift of the short-run Phillips curve.
Stagflation is the conjunction of
A. stagnation and recession. B. inflation and stagnation. C. depression and inflation. D. stagnation and deflation.
In the long run, a year-long drought that destroys most of the summer's wheat crops causes permanently:
A. higher prices. B. lower prices. C. lower output. D. None of these is true.