The output losses from an adverse inflation shock are ________ and the output losses from a fall in potential output are ________.
A. large; small
B. small; large
C. temporary; permanent
D. permanent; temporary
Answer: C
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Which of the following does not impact aggregate demand in the Keynesian model?
a. Changes in the supply of labor b. Net exports c. Household consumption d. Desired business investment demand e. Government purchases of goods and services
The theory of efficiency wages provides a possible explanation as to why
a. workers form unions. b. firms should try to reduce surpluses of labor. c. firms may be inclined to keep their workers' wages above the equilibrium level. d. firms may be inclined to keep their workers' wages below the equilibrium level.
Because the monopolist's demand curve is downsloping:
A. MR will equal price. B. price must be lowered to sell more output. C. the elasticity coefficient will increase as price is lowered. D. its supply curve will also be downsloping.
In POW camps during World War II, nearly everything was traded for cigarettes. For example, one bar of soap cost two cigarettes, and two candy bars cost four cigarettes. During the time of the POW camps, cigarettes:
A. served as money for those who smoked. B. did not serve as money because their value was not backed by government. C. served as money because they served as a unit of account, medium of exchange, and store of wealth. D. did not serve as money because no one controlled the supply of cigarettes.