A situation in which output decreases while prices increase is often referred to as:
A. inflation.
B. negative economic growth.
C. a recession.
D. stagflation.
Answer: D
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If real GDP grows by 3 percent, the velocity of circulation grows by -4 percent, and the quantity of money grows by 3 percent, then in the long run the inflation rate is
A) 1 percent. B) -1 percent. C) 4 percent. D) -4 percent. E) 10 percent.
In Europe during the 14th century, the Black Plague killed 24 million people or close to 37 percent of the population. How would this affect the production possibilities curves for the countries of Europe at that time?
a. The production possibilities curves for these countries would have shifted outward. b. The production possibilities curves for these countries would have shifted inward. c. The production possibilities curves for these countries would have been unaffected. d. This would have been illustrated by a movement along the production possibilities curves for these countries, but it would not have shifted them.
Branding:
A. promises the differences in products are completely perceived and not real. B. can be a barrier to entry. C. guarantees high-quality products. D. All of these statements are true.
The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the deadweight loss?
A) area B + area C + area D + area F B) area E C) area C + area D + area E + area G D) area A E) area F