Stagflation is a combination of ________ and ________.
A. inflation; recession
B. deflation; expansion
C. excessive aggregate spending; excessive aggregate supply
D. monetary policy; fiscal policy
Answer: A
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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.
A movement along the AE curve arises from a change in ________, and a movement along the AD curve arises from a change in ________
A) the price level; the price level B) real GDP; investment C) real GDP; the price level D) the price level; investment E) investment; the price level
International trade can make some individuals within a country worse off, even as it makes the country as a whole better off
a. True b. False Indicate whether the statement is true or false
Which of the following is NOT an effect of intra-industry trade if the concerned industry is monopolistically competitive?
A. Total output of the domestic industry increases as a result of such trade. B. There are few shifts in production among industries that put pressures on factor prices. C. There are considerable national gains that arise from trade because there is an increase in the number of varieties of products available in the country. D. Domestic consumers gain because such trade results in lower prices of domestic varieties of the good.