When, over a sustained period of time, the growth of aggregate business activity falls below what is considered the normal growth rate, the economy necessarily experiences
A) inflation.
B) deflation.
C) an expansion.
D) a recession.
D
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The return to government deficit after 2001 was due to
A) drop in the government revenues. B) both revenue drop and expenditure rise. C) rise in the government expenditure. D) After 2001, U.S. government did not experience budget deficit.
Based on the work of economist A.W. Phillips, economists concluded that
A) there is no trade-off between inflation and unemployment. B) high inflation rates are associated with low unemployment rates. C) unemployment can be effectively combated by raising wages. D) higher rates of inflation are associated with higher rates of unemployment.
Suppose two coffee snobs who must have their coffee and cream in exact proportions (each cup is 10 coffee per 1 unit cream) are invited to a weekend long event (during which they can easily consume 8 cups of coffee). Suppose Snob A is given 8 units of cream and Snob B is given 80 units of coffee. The post trading result (one in which any trade that makes both parties better off than their initial
allocation) will guarantee each person a. nothing b. at least 1 cup of properly made coffee. c. at least 2 cups of properly made coffee. d. exactly 4 cups of properly made coffee.
Marginal revenue product equals marginal revenue times the price of output.
Answer the following statement true (T) or false (F)