Demand-pull inflation can develop when
A. Inventories shrink and consumers bid up prices.
B. Undesired investment occurs.
C. There is a surplus of resources and so wages are bid up by employers.
D. There is a shortage of investment and investors bid up interest rates.
Answer: A
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Which of the following is not considered an automatic stabilizer?
a. Food stamp program for people with low incomes b. Welfare program for families with dependent children c. Medicaid, a health program for the poor d. Financial assistance for disabled people e. Unemployment programs that pay benefits to those who lose their jobs
Is the call for protection on the basis of "infant industry" valid?
a. No, because protection has no place in industrial development. b. No, protection is always improper. c. Uncertain, economic theory has no answer to this question. d. Yes, although it can be overstated and abused.
Economists define the short run as a time period in which:
a. all resources are fixed. b. all resources are variable. c. at least one input is fixed. d. the size of the firm can be varied.
The basic economic differences among nations throughout history concerning institutions, philosophy, and ideology mainly focus on:
A) unemployment and inflation. B) the ownership of factors of production and how they are coordinated in economic activity. C) the relative shares of agriculture, industry, and service sectors. D) the opportunity for social mobility.