Points outside a production possibility frontier represent inefficiency.
Answer the following statement true (T) or false (F)
False
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Which statement is FALSE?
A. Wages are not downwardly flexible. B. The rational expectations theorists argue that there is a natural level of real GDP toward which the economy gravitates. C. The rational expectations theorists believe anti-recession policies have no effect, but admit anti-inflationary policies may be wise. D. The rational expectations theorists believe that aggregate supply is the prime economic mover.
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.
Suppose option A has a higher variance than option B. Which of the following statements is, in general, true?
A. A risk-neutral person is indifferent between options A and B. B. A risk-averse person prefers option B to option A. C. A risk-averse person prefers option A to option B. D. There is insufficient information to determine which is true.
The graph below represents the market for a product where D1 and S1 show the initial supply and demand curves, and supply shifts to S2 due to a sales tax. The government's tax revenue is represented by area:
A. FIJG
B. ACEG
C. BCEF
D. ABFG