If the GDP deflator decreases from one year to the next, it can be concluded that the economy has experienced:
a. stagnation.
b. stagflation.
c. inflation
d. deflation.
d
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When Adam Smith's ten pin workers specialized, they were able to increase output of pins in a day from 200 to 48,000. One reason for the increase in pin output was due to
A) the time saved when workers do not need to shift from one task to another. B) the boredom the workers suffered when they stopped making a whole pin and only concentrated on one task such as painting the heads white. C) new machinery. D) the bonus they received when they produced more pins.
A curve that shows a set of consumption alternatives that give the same level of satisfaction is
A. an indifference curve. B. a budget line. C. an income curve. D. a substitution curve.
The amount by which government expenditures exceed revenues during a particular year is the:
A. public debt. B. budget deficit. C. full employment. D. GDP gap.
Refer to the graph below. Which of the following factors does not explain a movement along the AD curve?
A. The expenditure multiplier effect
B. The real-balances effect
C. The interest-rate effect
D. The foreign purchases effect