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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How does the time frame over which a supply decision is made influence the elasticity of supply? Explain your answer
What will be an ideal response?
Which of the following is most likely to happen if the aggregate demand curve for an economy (which was initially in equilibrium) shifts to the left? a. The equilibrium real GDP will decrease
b. The equilibrium price level in the economy will increase. c. The aggregate supply curve will shift rightward. d. The aggregate supply curve will shift leftward. e. The economy will experience an expansion.
The natural rate hypothesis argues that the economy will:
a. self-correct to the natural rate of inflation. b. require expansionary fiscal policy to reach the natural rate of unemployment. c. self-correct to the natural rate of unemployment. d. require expansionary monetary policy to reach the natural rate of unemployment.
Most flat tax proposals call for exempting income to a certain minimum level
a. True b. False Indicate whether the statement is true or false