In the long run, more costs become fixed
Answer the following statement true (T) or false (F)
False
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The Phillips curve will shift down with ________ or ________
A) a positive supply shock; an increase in expected inflation B) a positive supply shock; a decrease in expected inflation C) a negative supply shock; an increase in expected inflation D) a negative supply shock; a decrease in expected inflation
When an economy experiences deflation, consumption will:
A. decrease, because people will want to wait for prices to drop before spending. B. increase, because people will want to wait for prices to drop before spending. C. decrease, because people will lose value in their savings. D. increase, because people will lose value in their savings.
In an economy with persistent inflation
What will be an ideal response?
Other things held constant, an increase in consumption spending implies