One of the distinguishing differences between periods of low inflation and periods of high inflation is that
a. low inflation periods are short-lived.
b. high inflation periods are short-lived.
c. high inflation periods are long-lived.
d. low inflation leads to high inflation.
b
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Explain the differences between aggregate demand shocks and aggregate supply shocks
What will be an ideal response?
According to classical economists, government intervention is:
a. necessary to maintain a stable price level in the long run. b. necessary to maintain a stable price level in the short run. c. necessary to maintain full employment in the long run. d. necessary to maintain full employment in the short run. e. not necessary to maintain full employment.
Which of the following is an example of an organization using marginal analysis?
a. A government official considering what effect an increase in military goods production will have on the production of consumer goods. b. A farmer hoping for rain. c. A businessman calculating economics profits. d. A hotel manager calculating the average cost per guest for the past year.
A shortage occurs when the market price is lower than the equilibrium price.
Indicate whether the statement is true or false.