Inflation can be caused either by rapid growth rate of aggregate demand or by sluggish growth of aggregate supply.
Answer the following statement true (T) or false (F)
True
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If the economy is producing at point B, the opportunity cost of gaining 12 units of consumer goods is _______ units of capital goods.
Federal government expenditures, as a percentage of GDP
A) rose from 1950 to 1991, fell from 1992 to 2001, and have risen from 2001 to the present. B) rose from 1950 to 1980, fell from 1981 to 2001, and have risen from 2001 to the present. C) have fallen since the early 1950s to the present. D) have risen since the early 1950s to the present. E) rose from 1950 to 2001 and then fell from 2001 to the present.
Equilibrium wage will increase if quantity of labor demanded rises
Indicate whether the statement is true or false
Suppose rice is a normal good. If consumers' incomes fall, and a new technology is introduced that lowers the marginal cost of producing rice, then the equilibrium:
A. price of rice will increase, but we cannot say for sure what will happen to the equilibrium quantity. B. quantity of rice will increase, but we cannot say for sure what will happen to the equilibrium price. C. price of rice will fall, but we cannot say for sure what will happen to the equilibrium quantity. D. quantity of rice will decrease, but we cannot say for sure what will happen to the equilibrium price.