Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation.
B. low economic growth and high inflation.
C. high economic growth and low inflation.
D. low economic growth and low inflation.
Answer: B
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If the incentive to take advantage of a conflict of interest is high
A) removing the economies of scope that created the conflict may induce higher costs because of the decrease in the flow of reliable information. B) then the government must step in to remove the conflict. C) the costs of non-action in removing the conflict will always be higher than the cost of removing the conflict. D) firms will always step in and work to remove the conflict.
Economist A. P. Lerner's idea that equality of income maximizes society's welfare is based on the assumption that
a. individuals have dissimilar utilities, but private property ownership distorts individual utilities so that no income distribution exists that reflects true utilities b. individuals are egalitarian c. individuals have identical utility functions d. individuals have identical skills e. individuals would voluntarily choose income equality
If the opportunity cost of corn to wheat is 3:1 in the United States and 5:1 in France, only the United States would benefit from trade if the actual terms of trade between corn and wheat were 2:1.
Answer the following statement true (T) or false (F)
Answer the following statements true (T) or false (F)
1. The former Soviet Union was an example of a traditional economy. 2. The United States had a surplus balance of trade during most of the 1990s. 3. Deciding what to produce and allocating goods and services are functions of all types of economic systems. 4. Socialism combines monopoly, capitalism, private property, and a strong dictatorial central government.