The diagram above illustrates the pattern of:
Business cycles
Economic growth patterns
Wage movements over time
Price level movements
Business cycles
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What is the principal reason that economists give for the existence of deflationary and inflationary gaps?
a. Wages are flexible in the short run. b. Wages are flexible in the long run. c. Wages are fixed in the long run. d. Wages are fixed in the short run.
"When workers have a relatively small quantity of capital to use in producing goods and services, giving them an additional unit of capital increases their productivity by a relatively large amount.". This statement
a. is an assertion that production functions have the property of constant returns to scale. b. is consistent with the view that capital is subject to diminishing returns. c. is inconsistent with the view that it is easier for a country to grow fast if it starts out relatively poor. d. All of the above are correct.
Post-World War II inflation rates, as measured by the CPI
a) are overestimated due to the inability to measure quality improvements b) are underestimated due to the exclusion of import prices c) are not comparable across decades due to decennial changes in the base year d) have tended to move in the opposite direction of inflation rates as measured by the GDP deflator e) have become increasingly accurate as technology has improved
Suppose the amount of exports of textile machinery from Italy to the rest of the world equals 60 billion tons. The amount of imports of textile machinery into Italy from the rest of the world is 40 billion tons. Therefore, the intra-industry trade share for machinery is
A. 0.67. B. 1.5. C. 0.8. D. 0.2.