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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What is not true for a system of financial penalties for polluters?
A. Firms may be fined for pollution. B. Firms might have to pay a tax for each unit of pollution created. C. Firms would be encouraged to pollute less. D. Firms are always guaranteed the permit to pollute.
Doctors in private health care clinics provide better care than those in public clinics because:
A. they are better trained. B. they have more incentive to practice good medicine. C. their fixed salary is generally higher than the fixed salaries of public clinic doctors. D. their facilities are generally much more updated than public facilities.
Game theory is based on the idea that
a. government determines the rules of the game b. firms are strategically independent c. firms are price takers d. a player's strategy must take account of the strategies followed by other players e. a player's strategy must be independent of the strategies followed by other players
When a recessionary gap occurs
a. real output exceeds the natural level of output, and unemployment exceeds its natural rate b. real output exceeds the natural level, and unemployment is less than its natural rate c. real output is less than the natural level of output, and unemployment exceeds it natural rate d. real output is less than the natural level of output, and unemployment is less than its natural rate