AnswersISP ONLY Economics S5000XXInflation and Stagflation

Inflation and Stagflation — Unit test Answers

15 verified answers
21
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What is the difference between inflation and deflation?

A
Inflation can result from falling demand and boosts the value of money. Deflation can result from rising demand and reduces the value of money.
B
Inflation can result from rising demand and boosts the value of money. Deflation can result from falling demand and reduces the value of money.
C
Inflation can result from falling demand and reduces the value of money. Deflation can result from rising demand and boosts the value of money.
D
Inflation can result from rising demand and reduces the value of money. Deflation can result from falling demand and boosts the value of money.
22
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Read the paragraph.Government officials in Country M have determined that they need to take action to encourage the growth of their economy. To do this, they have introduced an incentive policy that offers citizens free education. This is extended to all individuals who sign a contract agreeing to work within their specific industry for the next ten years.Country M hopes to encourage economic growth by investing in

A
education to reduce unemployment and increase production.
B
new technologies to produce goods that are in great demand.
C
resources that can be traded with other nations.
D
research to develop goods that can be sold on a global scale.
23

How do consumers’ feelings about the economy help contribute to growth?

A
Positive consumer attitudes influence spending habits.
B
Positive consumer attitudes increase job prospects.
C
Positive consumer attitudes inspire increased production.
D
Positive consumer attitudes can end a depression.
24

What is the name of the period when an economy begins to shrink?

A
recession
B
depression
C
recovery
D
peak
25

A possible result of disequilibrium is

A
excess demand.
B
lower demand.
C
fixed prices.
D
stable availability.
26

In which way do producers try to differentiate themselves in monopolistic competition?

A
price
B
advertising
C
product features
D
image
27

This graph shows changes in GDP and the unemployment rate in the United States in recent years.Which statement most accurately describes the trends shown on this graph?

Question illustration
A
When GDP falls, unemployment rises.
B
GDP and unemployment have little to do with each other.
C
When GDP rises, unemployment rises as well.
D
GDP and unemployment rise at times of world crises.
28

As a result of decreased production, David lost his job designing cars. Which terms can be used to describe David? Select two options.

A
cyclically unemployed
B
domestically unemployed
C
frictionally unemployed
D
structurally unemployed
E
still employed
F
unemployed
29

What decisions does the business cycle help businesses make? Choose four answers.

A
whether to stay at old facilities or move to new facilities
B
whether to grow or shrink the business
C
whether to keep or change products
D
whether to increase or decrease production
E
whether to hire or lay off workers
F
whether to invest or save money
30

When prices drop below the point where supply and demand meet, it results in

A
coordination.
B
disequilibrium.
C
equilibrium.
D
production.

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