Is there downward price inflexibility applicable to today’s economy? What factors might explain it?
What will be an ideal response?
Economists give many reasons for the downward price-level inflexibility in the economy. They note that the price level has not declined since one year in the 1950 despite the fact that there have been many recessions since then, including the severe recession of 2007–2009. The reasons for price-level inflexibility include fear of price wars, the menu cost of making price changes, long-term wage contracts, the payment of efficiency wages, and a minimum wage.
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Economies where production and distribution decisions are made by the government are called
A) command economies. B) market economies. C) mixed economies. D) capitalist economies.
If the income of buyers increases and a company maintains the same price, what is the most likely impact on quantity sold? Explain. Draw a graphical display of the result.
What will be an ideal response?
The most significant form of revenue in developed countries is the income tax
a. True b. False
A positive economic statement is one that
A) can be refuted. B) is free of the ceteris paribus assumption. C) is based on a value judgment. D) asserts something about the role of moral behavior in building a strong economy.