The inflation caused by supply shocks is called:
a. demand-pull inflation.
b. cost-push inflation.
c. wage inflation.
d. expected inflation.
Ans: b. cost-push inflation.
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Which of the following will lead to a movement along the same demand curve?
A. Changes in income B. Changes in the price of substitute goods C. Changes in the price of the product D. Changes in the preference of the consumer
On an average, growth in per capita income is associated with a:
A) fall in inequality. B) fall in poverty. C) rise in poverty. D) rise in inequality.
Suppose that the wage for musicians increases relative to other occupations. We know that ________ people will work in music, and the total number of hours worked will ________.
A. more; increase B. more; decrease C. fewer; increase D. fewer; decrease
The government raises gasoline taxes as part of the price of gasoline and receives more tax revenues. However, after five years, the government discovers that revenues from the gasoline tax have declined. This situation would be most likely to occur if
A. the long-run elasticity of demand was greater than the long-run elasticity of supply. B. the demand for gasoline was perfectly inelastic in both the short run and the long run. C. the long-run elasticity of supply was much greater than the long-run elasticity of demand. D. the demand for gasoline was inelastic in the short run, but elastic in the long run.