If rapid increases in oil prices caused price levels to increase and real GDP to decrease in the short run, the economy would experience
A) stagflation.
B) long-run economic decline.
C) hyperinflation.
D) an increase in the natural rate of unemployment.
Answer: A
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Senator Smith says that in order to help poor countries develop, the United States should: 1 . Prevent U.S. corporations from investing in poor countries because they take profits that the poor countries should have; 2 . Not import goods from poor countries that use child labor; 3 . Work to promote political stability in poor countries; and 4 . Reduce poor countries' reliance on market forces in
their economies. How many of these ideas are likely to help poor countries grow? a. 1 b. 2 c. 3 d. 4
Comparative advantage leads to producing at a:
A) higher opportunity cost. B) lower opportunity cost. C) higher dollar cost. D) point where costs just begin to fall.
The theory of public choice examines
A. The role of self-interest in public decisions. B. How to apply cost-benefit analysis. C. The optimal government intervention to correct market failures. D. How a policy of laissez faire works to allocate resources.
Behavioral economists have discovered that
A) transitivity of preferences always holds, even in animals. B) the law of demand does not hold in controlled experiments. C) transitivity of preferences does not always hold, especially for young people. D) reflexivity of preferences is not true.