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
You might also like to view...
"According to the Coase theorem, if Gabriel wants the local television station to cease having helicopters fly over his house at night, he will be more likely to be able to reach an agreement with the station if the property right to the airspace is
clearly defined and the transaction costs of negotiating are high." Is this statement true or false? Explain your answer.
According to the efficiency wage model, firms will pay the real wage that
A) maximizes workers' marginal productivity. B) maximizes the marginal productivity of capital and the marginal productivity of labor together. C) maximizes effort per dollar of real wage. D) minimizes hiring and training costs to the firm.
You took out a loan one year ago at a nominal interest rate of 7.5%. The CPI stood at 173.2 at the time and you expected it to rise to 178.6 over the year. Today the CPI is actually 179.5
Calculate the expected real interest rate on the loan and the real interest rate on the loan.
The Clayton Act prohibits all horizontal mergers, regardless of their economic consequences
a. True b. False