One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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The most common form of "forced savings" in the U.S. is:
A. Medicare. B. unemployment insurance. C. Social Security. D. FICA.
The Great Depression really began in the second half of the year ________.
Fill in the blank(s) with the appropriate word(s).
When a government influences the exchange rate of its currency, it is said to be practicing “dirty floating.”
Answer the following statement true (T) or false (F)
Answer the following questions true (T) or false (F)
1. Lowering the individual income tax rate will increase household disposable income and consumption spending. 2. Contractionary fiscal policy involves decreasing government purchases or increasing taxes. 3. Expansionary fiscal policy is used to increase aggregate demand in an attempt to fight rising inflation.