The investment rate is the percentage of total output allocated to
A. The production of new plants, equipment, and structures.
B. Education and training for the workforce.
C. Consumer retirement accounts.
D. Saving.
Answer: A
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If demand pull inflation occurs when the economy is already at potential GDP, then following the initial increase in aggregate demand, the
A) AS curve shifts rightward. B) potential GDP line shifts rightward. C) AS curve shifts leftward. D) potential GDP line shifts leftward. E) None of the above is correct because demand-pull inflation shifts only the aggregate demand curve.
Hurricane Katrina destroyed oil and natural gas refining capacity in the Gulf of Mexico which subsequently drove up natural gas, gasoline, and heating oil prices
Three years later, once the refining capacity was restored, these prices came back down. The restoration of refining capacity should A) move the economy up along a stationary short-run aggregate supply curve. B) move the economy down along a stationary short-run aggregate supply curve. C) shift the short-run aggregate supply curve to the left. D) shift the short-run aggregate supply curve to the right.
Which of the following is an economic argument used to explain why slavery persisted in the U.S.?
(a) Slavery crushed out individualism among slaves. (b) The social structure of slavery did not permit black leaders to lead revolts. (c) Slavery was an overall moral institution. (d) Slavery was a rational institution.
Refer to the above figure. If government sets the maximum legal price of gasoline at $2 per gallon, then the $2 limit acts as
A) a price floor. B) a price ceiling. C) an equilibrium price. D) a just price.