A situation in which output decreases while prices increase is often referred to as:
A. inflation.
B. negative economic growth.
C. a recession.
D. stagflation.
Answer: D
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The primary economic explanation as to why a world-renowned architect cannot attain the "superstar" status that an athlete or actor can attain is that
a. architects' services are not as highly valued by society as are the services of athletes and actors. b. only physically attractive people can become superstars, and it would be a coincidence if a highly talented architect were also physically attractive. c. government regulations place restrictions on the incomes of architects, but there are no such restrictions on the incomes of athletes or actors. d. it is impossible, currently, for an architect to supply his or her services at low cost to every customer.
Suppose the government increases government purchases and there is some crowding out. As a result
A) the rightward shift of the aggregate demand curve due to increased government purchases is reinforced by the crowding out effect. B) the rightward shift of the aggregate demand curve due to increased government purchases is offset to some degree by the crowding out effect. C) the rightward shift of the aggregate demand curve due to increased government purchases is completely offset by the crowding out effect. D) the aggregate demand curve shifts right due to increased government purchases and the short- run aggregate supply curve shifts left due to the crowding out effect.
The U.S. antitrust laws
A. promote competition. B. are outdated and rarely used anymore. C. aid monopolies in their quest to dominate the market for a good or service. D. are administered by the Department of Commerce.
The substitution effect shows that
A) if the price of a good increases, consumers buy more of that good and less of all others. B) if the price of a good falls relative to all other goods, consumers buy less of that good and more of all others. C) if the price of a good falls, consumers buy less of all goods. D) if the price of a good rises, consumers buy less of that good and more of others.