Answer the following questions true (T) or false (F)
1. Stagflation refers to when the general economy is experiencing a falling unemployment rate and a rising inflation rate.
2. The unemployment of capital can be expressed in terms of the manufacturing capacity utilization rate.
3. The consumer price index or CPI is given by the cost of a standard market basket of goods and services in the current period relative to the GDP implicit price deflator.
1. FALSE
2. TRUE
3. FALSE
You might also like to view...
Which of the following would likely result if a constitutional amendment requires the U.S. government to balance its budget every year?
a. Fiscal spending would increase largely resulting in a higher government debt b. Automatic stabilizers would cease to work and the severity of economic fluctuations would worsen. c. Interest rates would become highly volatile with the increased use of discretionary monetary policies. d. Unemployment would be below its natural rate and output would be at the potential level.
Suppose the world price of coffee is $2 per pound and Brazil's domestic price of coffee without trade is $3 per pound. If Brazil allows free trade, will Brazil be an importer or an exporter of coffee?