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 the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit rises, the amount of loanable funds demanded will be
A) less than $450 billion. B) $450 billion. C) between $300 billion and $450 billion. D) greater than $450 billion.
A good is rival in consumption if:
a. the supplier of that good can prevent people who do not pay from consuming it. b. the supplier of that good cannot prevent people who do not pay from consuming it. c. the same unit of the good cannot be consumed by more than one person at the same time. d. there is no free-rider problem.