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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When the ratio of domestic prices to foreign prices falls:
A) the real exchange rate depreciates only when the nominal exchange rate depreciates. B) the real exchange rate depreciates even when the nominal exchange rate is constant. C) the real exchange rate appreciates. D) the real exchange rate depreciates only when the nominal exchange rate appreciates.
The average cost curve
A. is the vertical summation of the AFC and the AVC curves. B. lies below the AVC curve. C. lies below the AFC curve. D. is the vertical summation of the MC and AVC curves.
The money supply will grow faster through deposit creation when the legal reserve requirement is
a. high and banks hold excess reserves b. high and banks cannot find good customers to lend to c. low and banks are able to lend out all of their excess reserves d. low and banks are unable to loan out all of their excess reserves e. high and banks are not able to loan out all of their excess reserves
If a typical consumer is willing to pay $3,000 for a plum and $1,000 for a lemon, and there is a 50% chance of getting a lemon, the typical consumer is willing to pay $2,000 for a used car.
Answer the following statement true (T) or false (F)