Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation.
B. low economic growth and high inflation.
C. high economic growth and low inflation.
D. low economic growth and low inflation.
Answer: B
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Suppose that you know a good is a normal good for a consumer. Which of the following can you then conclude to be true:
A. The own-price elasticity of demand is less than -1. B. The income elasticity of demand is greater than 0. C. The own-price elasticity of demand is greater than -1. D. The income elasticity of demand is less than 0. E. Both (a) and (b). F. Both (a) and (d). G. Both (b) and (c). H. None of the above.
In the open-economy macroeconomic model, the supply of loanable funds comes from
a. national saving. b. private saving. c. domestic investment. d. the sum of domestic investment and net capital outflow.
Which statement is true?
A. Both craft and industrial unions are organized along the lines of particular skills. B. Neither craft nor industrial unions are organized along the lines of particular skills. C. Craft unions—but not industrial unions—are organized along the lines of particular skills. D. Industrial unions—but not craft unions—are organized along the lines of particular skills.
Holding the level of prices fixed implies that a given decrease in aggregate demand
A. has the same effect on real GDP as when prices are more flexible. B. will have a larger effect on real GDP than would be the case if prices were more flexible. C. has a smaller effect on nominal GDP than when prices are more flexible. D. will have a smaller effect on real GDP than would be the case if prices were more flexible.