Which of the following is NOT a determinant of the price elasticity of demand?
A) existence of substitutes
B) expenditures on the good as a share of a consumer's budget
C) the amount of time allowed for adjustment to changes in the price of the commodity
D) the price level in a country
Answer: D
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When firms in the same industry locate in the same geographic region, it is known as dumping
a. True b. False Indicate whether the statement is true or false
Suppose that the Fed announces a low-money-growth policy to control inflation and workers sign low-wage contracts as a result. If instead, the Fed had implemented a high-money-growth policy, which of the following would not occur?
a. The unemployment rate would increase. b. The Fed's stated policy would be time inconsistent. c. The unemployment rate would be less than the natural rate. d. The Fed would not achieve credibility through its actions. e. The rate of inflation would be higher than expected.
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Economic stagnation coupled with high inflation is commonly called:
A. stagflation. B. inflationary stagnation. C. stagnatory growth. D. inflagnation.