Stagflation usually results from
A) a supply shock.
B) a decrease in aggregate demand.
C) an increase in aggregate supply.
D) an increase in aggregate demand.
Answer: A
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Suppose that the current overall unemployment rate is 7.5%. If structural unemployment is 1.5%, frictional unemployment is 3%, and cyclical unemployment is 2%, what is the unemployment rate that is due to seasonal factors?
a. 14.0% b. 5.5% c. 4.5% d. 6.0% e. 1.0%
If the price elasticity of demand is 1.5, regardless of which two points on the demand curve are used to compute the elasticity, then demand is
a. perfectly inelastic, and the demand curve is vertical. b. elastic, and the demand curve is a straight, downward-sloping line. c. perfectly elastic, and the demand curve is horizontal. d. elastic, and the demand curve is something other than a straight, downward-sloping line.