Cost-push inflation may be caused by:
A. an increase in resource availability.
B. a negative supply shock.
C. a decline in per-unit production costs.
D. a decrease in wage rates.
Answer: B
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Consider a consumer choosing between spending her money on food, F, or clothing, C. Assume that a unit of food and a unit of clothing have the same price, and that the consumer can afford a total of 20 units of either food or clothing. If B stands for benefits then "F + C = 10" is the:
A. optimal solution. B. objective function. C. constraint. D. first-order condition.
Costume jewelry is produced in a monopolistically competitive market. One producer produces 700 necklaces and at that output level, MR = MC = $3 . We know then that
a. the price is $3 b. economic profit is $2,100 c. the price is higher than $3 d. new firms will enter the market e. the firms should produce the 700 necklaces in the short run, but shut down in the long run
Suppose you earn $4,800 a month and spend exactly $160 in each of the 30 days. If you deposit $1, 600 into your checking account on the first day, eleventh day, and twenty-first day of the month, then your average quantity of money demanded is
A) $800. B) $1,200. C) $2,400. D) $4,800.
Suppose that a worker in Country A can make either 10 iPods or 5 tablets each year. Country A has 100 workers. Suppose a worker in Country B can make either 2 iPods or 10 tablets each year. Country B has 200 workers. Which of the following is true?
A. Neither country can benefit from trade since no comparative advantage exists. B. Country B should produce iPods and Country A should produce tablets, and they could benefit from trade. C. Because Country B has the absolute advantage in producing tablets, they should specialize in the production of tablets. D. Country B should produce tablets and Country A should produce iPods, and they could benefit from trade.