Disinflation is
A. the same as hyperinflation.
B. a substantial reduction in the rate of inflation.
C. a negative inflation rate.
D. a sudden change in the normal behavior of inflation, unrelated to the nation's output gap.
Answer: B
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Agraria is a small agricultural country that does not trade with the rest of the world. Based on this information, we can conclude that Agraria is a(n) ________ economy
A) closed B) communist C) command D) open
The usual results of an adverse supply shock are
a. a rise in prices and a fall in output. b. a fall in prices and a rise in output. c. increased growth and lower inflation. d. a rise in prices and a rise in output.
Describe the output and price effects that influence the profit-maximizing decision faced by a firm in an oligopoly market. How does this differ from output and price effects in a monopoly market?
Suppose that Starbucks reduces the price of its premium coffee from $2.20 to $1.80 per cup, and as a result, the quantity sold per day increased from 350 to 450. Over this price range, the price elasticity of demand for Starbucks coffee is:
A. 0.40. B. 0.80. C. 1.25. D. 2.50.