Describe how a demand-pull inflation can occur
What will be an ideal response?
Demand-pull inflation starts from an initial increase in aggregate demand. But if this increase is a one-time only event, the result is a higher price level but not inflation. For inflation to occur, aggregate demand needs to continue to increase. Continuing increases in the quantity of money result in continuing increases in aggregate demand, so monetary growth is necessary for a demand-pull inflation.
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The production function Q = 0.8X + 0.6Y exhibits
A) increasing return to scale. B) decreasing returns to scale. C) constant returns to scale. D) economies of scale.
How does the text distinguish between coercion and persuasion?
What will be an ideal response?
Are federal budget deficits related to trade deficits?
A. Yes. Higher deficit spending goes up resulting in more government borrowing, and foreign residents who lend funds to the U.S. government have fewer resources to spend U.S. export goods. B. No. The budget deficit is entirely a domestic matter, while the trade deficit only affects U.S. citizens who travel abroad. C. Yes. If U.S. consumers buy too many imported goods, they do not have funds to save, and a budget deficit results. D. Yes, but only if the quality of U.S. goods and services is deteriorating.
Refer to the data. The average total cost of producing 3 units of output is:
A. $14.
B. $12.
C. $13.50.
D. $16.