Which of the following statements most likely describes what occurred in this economy?
a. Stagflation resulted from the decrease in price levels coupled with lower output.
b. An inflationary gap resulted due to the shift from RGDPNR to RGDP2.
c. Output decreased and unemployment increased.
d. An increase in consumer confidence shifted AD1 to AD2.
c. Output decreased and unemployment increased.
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If a firm faces a downward-sloping demand curve
A) the demand for its product must be inelastic.
B) it has no control over the price or the quantity sold.
C) it must reduce its price to sell more units.
D) it will always make a profit.
Refer to the graph shown. The shift from SATC3 to SATC4 reflects:
A. diminishing marginal productivity. B. economies of scale. C. diseconomies of scale. D. increasing marginal productivity.
When spending is greater than output, firms will experience falling inventories, and prices of goods and services will rise.
Answer the following statement true (T) or false (F)
Which of the following is the broadest based price index?
A. the consumer price index B. the producer price index C. the implicit price deflator D. the personal consumption expenditures price index