A decrease in the average level of prices of goods and services is known as:
a) A recession.
b) The business cycle.
c) Deflation.
d) Inflation.
Answer: c) Deflation.
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If the price of inputs rises and consumer expectations about future economic activity worsens:
a. The change in price index is uncertain, and real GDP falls. b. The change in price index is uncertain, and real GDP rises. c. Price index rises, and the change in real GDP is uncertain. d. Price index falls, and real GDP rises. e. Price index falls, and real GDP falls.
According to the World Bank definitions, there are more people in the world living in extreme poverty than there are living in severe poverty.
Answer the following statement true (T) or false (F)
If the supply of unskilled domestic labor and the supply of unskilled immigrant labor are both perfectly inelastic, then the typical market equilibrium will be such that
A. immigrant labor will replace domestic labor. B. the postimmigration equilibrium will be associated with lower wages being paid to the unskilled immigrants compared to the wages paid to unskilled domestic labor. C. labor demand will shift out with increased immigration. D. the perfectly inelastic supply of unskilled domestic labor will prevent the hiring of any unskilled immigrant labor. E. wages paid to unskilled domestic labor will be less under immigration than under no immigration.
Refer to the graph above. Which of the following would shift the investment demand curve from ID 2 to ID 3 ?
A. A lower real interest rate
B. Rising maintenance costs of investment goods
C. Increasing business taxes
D. Falling stock of capital resources while output is high