In the 1990s, the United States benefited from a series of favorable supply shocks. This caused a(n)
A. increase in inflation and unemployment.
B. decrease in inflation and unemployment.
C. increase in inflation and a decrease in unemployment.
D. decrease in inflation and an increase in unemployment.
Answer: B
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Which of the following statements best describes the rational expectations hypothesis?
A) Individuals will not enter into long-term agreements unless they are certain about the payments they will receive. B) It is likely that individuals will consistently make errors. C) Individuals will make random errors, independent of previous errors. D) It is reasonable to expect individuals to consistently underestimate the level of inflation.
An empirical study compared the price of eyeglasses in states that restricted advertising by optometrists with those that did not.The study revealed:
a. That the average price of eyeglasses in states where advertising was restricted was higher than the average price in states were advertising was not restricted b. That the average price of eyeglasses in states where advertising was not restricted was higher than the average price in states where advertising was restricted c. That the average price of eyeglasses did not differ between states where advertising was restricted and those in which advertising was not restricted d. That the greater the level of advertising, the higher the average price of eyeglasses
Markets will always create more efficient outcomes without government intervention.
Answer the following statement true (T) or false (F)
Are sales of used goods included in GDP? Explain why or why not. Hint: Remember how GDP is defined