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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What makes the demand for some goods elastic and the demand for other goods inelastic?
What will be an ideal response?
Average variable cost (AVC)
A) is the variable cost divided by the average sales price of the final good. B) is the variable cost divided by the quantity of output produced. C) is equal to average fixed cost (AFC) when no output is produced. D) is always less than average fixed cost (AFC).
When national income in other nations increases:
A. the quantity of real domestic output demanded increases. B. the quantity of real domestic output demanded decreases. C. aggregate demand decreases. D. aggregate demand increases.
Recessions occur because of:
A. real adverse shocks to the economy. B. shocks to technology. C. difficulties in coordinating economic affairs. D. All of these.