One reason stagflation is difficult to recover from is because:
A. less output requires less inputs to be hired.
B. prices tend to adjust more quickly downward than upward.
C. wages are sticky downward.
D. input prices increase with output prices.
Answer: C
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In Figure 3-7, if we compare a move from point B to C with a move from point A to point B, we can see that
A. the opportunity cost of the move from B to C is higher than the opportunity cost of a move from A to B. B. the opportunity cost of the move from B to C is lower than the opportunity cost of a move from A to B. C. the opportunity cost of the move from B to C is equal to the opportunity cost of a move from A to B. D. the production possibilities frontier has a positive slope.
Negative output gap indicates that
A) the actual real GDP is above natural real GDP. B) the actual real GDP is below natural real GDP. C) nominal GDP is above real GDP. D) nominal GDP is below real GDP.
Which of the following statements can correctly be made about social regulation? I. Extensive social regulation may have an anticompetitive effect. II. The benefits of social regulation are easier to measure than are the costs of social regulation
A) I only B) II only C) both I and II D) neither I nor II
We calculate the amount of physical capital in an economy by adding up the value of all:
A. skills and expertise of the working age population. B. skills and expertise of all employed people. C. tools, equipment, and structures. D. technological capabilities used in production.