One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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In the following table, the United States has an absolute advantage in producing___________?
| COUNTRY | POTATOES | WHEAT |
| United States | 4 | 2 |
| Ireland | 3 | 1 |
It takes a considerable amount of time to increase the production of pork. This implies that
A. the short-run supply curve for pork is relatively less elastic than the long-run supply curve for pork. B. the long-run supply curve for pork is relatively less elastic than the short-run supply curve for pork. C. a change in the demand for pork will not affect its price in the short run. D. an increase in the demand for pork will elicit a larger supply response in the short run than in the long run.
Which of the following are theories meant to explain "Why Price Levels are Lower in Poorer Countries"?
A) only Bhagwati-Kravis-Lipsey B) only Balassa-Samuelson C) only Goldberg-Knetter D) Bhagwati-Kravis-Lipsey and Balassa-Samuelson E) Bhagwati-Kravis-Lipsey and Goldberg-Knetter
The job loss rate
A) equals 1 minus the job finding rate. B) remains constant over the business cycle. C) rises in recessions. D) rises in expansions.