The sacrifice ratio measures ______.
a. the amount of output lost when inflation is increased by one percent
b. the amount of output lost when inflation is decreased by one percent
c. the number of jobs lost when output is decreased by one percent
d. the number of jobs lost when output is increased by one percent
b. the amount of output lost when inflation is decreased by one percent
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Efficiency wage theory provides a reason for uncontracted nominal wages to ________ when nominal aggregate demand falls, thus ________ a recession
A) fall proportionately, leading to B) fall proportionately, preventing C) remain unchanged, leading to D) remain unchanged, preventing
Perfectly competitive firms are earning economic profits at a market price of $18 and an average total cost of $15. If new firms enter and increase the average total cost for all firms, the market price will ________ until ________.
A) fall; it reaches the new lower average total cost B) increase; it reaches the new higher average total cost C) fall; it reaches the new higher average total cost D) increase; economic profits are equal to zero
Within the production possibilities frontier (PPF) framework, choice is depicted by the
A) PPF itself. B) PPF being bowed outward. C) need to select among the points making up the PPF. D) straight-line PPF.
(Figure: Two SRAS Curves) The figure shows the AD-AS model with two SRAS curves. If the economy is initially at Point A and expected inflation rate remains unchanged, the economy can achieve a real GDP growth rate of 9% only by
What will be an ideal response?