One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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When economists say scarcity, they mean:
a. there are only a limited number of consumers who would be interested in purchasing goods. b. the human desire for goods exceeds the available supply of time, goods and resources. c. most people in poorer countries do not have enough goods. d. goods are so expensive that only the rich can afford it.
If a firm's output equals 10, product price equals $5.00, TFC = $8.00, and TVC = $60.00, then AVC would equal
a. $.80 b. $1.00 c. $6.00 d. $60.00 e. $8.00
A factor that would reduce the ability of the Social Security system to maintain current benefit levels with constant tax rates is
a. rapid real wage growth. b. reduced population growth. c. adoption of a "pay as you go" system. d. a slowdown in inflation.
Which of the following will shift the aggregate demand curve to the left?
A. A new technology is developed that will increase profits. B. Income taxes are raised. C. The government increases spending on education. D. Consumers become optimistic about the future.