Stagflation occurs when the economy's inflation rate is high and
A. the unemployment rate is high.
B. the unemployment rate is low.
C. employment is high.
D. the rate of change in economic activities is positive.
Answer: A
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Keynes thought that the key to determining the broader economic effects of investment fluctuations
A) was to examine how businesses react to flexible prices and wages. B) was to closely regulate the real interest rate. C) was to understand the relationship between how much people earn and their willingness to engage in personal consumption spending. D) was to understand how changes in the money supply influences consumption decisions.
An American consumer wants to buy a Swiss watch. The exchange rate is 1USD=0.89 CHF(Swiss Francs). The watch costs 100 Swiss Francs. How much would it cost him in dollars?
a. $89 b. $112.36 c. $100 d. $160.82
Which of the following is among the arguments in favor of using government intervention to reduce income inequality?
A. Large income differences eventually lead to political strife and will undermine support for a market economy. B. Government intervention is more effective in promoting creativity and hard work than the hope of higher earnings. C. The income distribution statistics understate inequality because they fail to take economic mobility into account. D. Taking money away from individuals who have earned it is unfair and immoral.
The demand for a good is inelastic. Which of the following would be an explanation for this?
A. The good costs a large portion of one's total income. B. The good is a necessity. C. The time interval considered is long. D. The good is specifically defined.