During a period of inflation, are all prices rising? Explain your answer.
What will be an ideal response?
No. Inflation is defined as an increase in the average level of prices. Inflation does not mean that all prices are rising. Relative prices may stay the same, increase, or decrease during inflation.
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A key element of real business cycle theory is that
a. labor supply is not responsive to changes in real wages. b. labor supply is highly elastic. c. as the wage increases, workers are richer and work less. d. none of the above.
According to recent research by Golden and Katz, __________ led the way in establishing high schools in the 1920s
a. the urban centers of the North b. the mid-Atlantic states c. California d. the Middle West, including Iowa and Nebraska
Which of the following characteristics of competitive markets is necessary for firms to be price takers? (i) There are many sellers. (ii) Firms can freely enter or exit the market. (iii) Goods offered for sale are largely the same
a. (i) and (ii) only b. (i) and (iii) only c. (ii) only d. (i), (ii), and (iii)
The economy is in both a short- and long-run equilibrium if:
A. the long-run aggregate supply curve is at potential output. B. current inflation equals expected inflation and current output equals potential output. C. the aggregate demand curve intersects the short-run aggregate supply curve. D. the short-run aggregate supply curve intersects the long-run aggregate supply curve at potential output.