Which of the following is not a characteristic of cost-push inflation?
A. Falling unemployment
B. Falling real output
C. Automatically self-limiting
D. Rising general price level
Answer: A
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Suppose the market-clearing price of milk is $3.00 per gallon, but the diary industry persuades the government to establish a legally-mandated price support at $4.00 per gallon. The newly legislated price tends to
A) reduce the demand for milk. B) increase the production of milk. C) create a shortage of milk. D) decrease the price of milk products.
When resources are assigned to inappropriate tasks, that is, tasks for which they are not the best match, the result will be producing at a point
A) where the slope of the PPF is positive. B) where the slope of the PPF is zero. C) inside the PPF. D) outside the PPF.
Refer to Figure 4-6. What area represents the deadweight loss at P2?
A) G + H B) C + E C) B + C D) C + E + H
________ in the expected future domestic exchange rate causes the demand for domestic assets to ________ and the domestic currency to depreciate, everything else held constant
A) An increase; increase B) An increase; decrease C) A decrease; increase D) A decrease; decrease