Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation.
B. low economic growth and high inflation.
C. high economic growth and low inflation.
D. low economic growth and low inflation.
Answer: B
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The size of a deadweight loss in a market is reduced by
A) market price being close to marginal cost. B) government legislating a ceiling price. C) government legislating a price floor. D) creative destruction.
The government performs each of the following economic functions except
A. collecting taxes. B. spending. C. issuing regulations. D. operating the price mechanism.
Last year, you earned a nominal wage of $10 per hour and the price level was 120 . This year your nominal wage is $11 per hour, but you are unable to purchase the same amount of goods as last year. The price level this year must be
a. 135 b. 132 c. 125 d. 121
A decrease in demand will cause the equilibrium price and quantity of a good to fall, ceteris paribus.
Answer the following statement true (T) or false (F)