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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If the government repeals an investment tax credit and increases income taxes,
a. real GDP rises, and the price level could rise, fall, or stay the same. b. real GDP falls, and the price level could rise, fall, or stay the same. c. real GDP and the price level rise. d. real GDP and the price level fall.
Economies of scale are associated with:
A. zero setup costs. B. the short run. C. indivisible setup costs. D. diminishing marginal productivity.
Increases in real GDP since 1900 can actually underestimate growth in the standard of living for Americans since 1900 because
A) the level of pollution in 1900 was much higher than it is today. B) the crime rate was higher in 1900 than it is today. C) goods and services are more expensive today as compared to 1900. D) the quality of health care that exists today was not available in 1900.
Cost-push inflation tends to be characterized by all of the following, except:
A. Rising general price level B. Falling real output C. Automatically self-limiting D. Falling unemployment