The labels for the axes of the aggregate demand graph should be ________.
A. quantity of a product on the vertical axis and the price of a product on the horizontal axis
B. real domestic output on the vertical axis and the price level on the horizontal axis
C. real domestic output on the horizontal axis and the price level on the vertical axis
D. price of a product on the vertical axis and quantity of a product on the horizontal axis
Answer: C
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Which of the following is not an effort by McDonald's to cope with diseconomies of scale?
a. being exposed to country and regions risk, such as environmental protests b. putting mini-restaurants in airports, gas stations, and Wal-Marts c. allowing managers in each region of the U.S. more leeway in pricing and promotion d. reducing product development time e. closing unprofitable restaurants
Which of the following is an example of asymmetric information?
a. A student adopting unfair means to complete his/her assignment. b. A commodity trader buying goods at a low price and selling them off at a high price. c. A builder selling houses built on property that is zoned for industrial use. d. A buyer paying a pre-contracted price which is lower than the current market price.
Principal-agent problems arise due to hidden product characteristics
Indicate whether the statement is true or false
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.