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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Net public debt is
A) the excess of annual tax revenues over annual government spending. B) the sum owed by the public to keep the Social Security system afloat. C) the portion of government debt held by private individuals and firms. D) the excess of annual government spending over annual tax revenues.
In comparing growth rates of money growth and inflation across countries, the long-run proposition of the quantity theory of money is supported
Indicate whether the statement is true or false
The demand for a textbook written by Schwarz and Mobley is Q = 20,000 ? 50P; supply is Q = 2,000 + 100P. Students complain about the high price of textbooks, resulting in a price ceiling and, unfortunately, a shortage of texts. Below what price will shortages occur?
If purchasing power parity holds between the U.S. and China:
A. the real exchange rate must be 1. B. the U.S. must no longer have a trade deficit. C. the nominal exchange rate must be 1. D. China must no longer have a trade deficit.