The term sticky prices refers to:
Prices that do not change quickly in response to changes in supply and demand
Prices that are set by the government and cannot be changed by firms
Prices that are adjusted continuously in response to changes in the economy
Prices that are set by monopolies to maximize profit
Correct Answer :
A. Prices that do not change quickly in response to changes in supply and demand
Related Questions
The term comparative advantage refers to:
The ability of one country to produce a good or service at a lower opportunity cost than another country
The ability of one country to produce a good or service with fewer resources than another country
The ability of one country to produce a good or service at a higher opportunity cost than another country
The ability of one country to produce all goods and services more efficiently than another country
The term monetary policy refers to:
Central bank policies related to interest rates and money supply to influence the economy
Government policies related to taxation and spending to influence the economy
Policies aimed at regulating international trade
Policies related to the regulation of financial markets
The term balance of payments refers to:
A record of all economic transactions between residents of a country and the rest of the world in a given period
The difference between government revenues and expenditures in a given period
The difference between exports and imports of goods and services in a given period
The total amount of money in circulation in a country
The money supply is primarily determined by:
The Federal Reserve
Commercial banks
The Treasury Department
The President of the United States
The term frictional unemployment refers to unemployment that occurs due to:
Temporary transitions between jobs or careers
Mismatch between the skills of workers and the skills required by employers
Changes in aggregate demand
Fluctuations in the business cycle
If the government implements expansionary fiscal policy, it will likely lead to:
Higher inflation and higher economic growth
Lower inflation and lower economic growth
Higher inflation and lower economic growth
Lower inflation and higher economic growth
The long-run aggregate supply curve is vertical because it is determined by:
The level of government spending
The level of potential output
The level of aggregate demand
The level of inflation
The term tax incidence refers to:
The way in which the burden of a tax is shared between buyers and sellers in a market
The total amount of revenue collected by the government from taxes
The impact of a tax on the overall level of prices in an economy
The distribution of income among different households in an economy
The term ceteris paribus means:
All else equal
Let the buyer beware
Supply creates its own demand
The invisible hand
The term long-run Phillips curve suggests that there is a trade-off between:
Inflation and unemployment in the long run
Inflation and output in the short run
Government spending and taxes
Monetary policy and fiscal policy
The term structural deficit refers to a deficit that exists even when the economy is operating at:
Full employment
Below full employment
A recessionary gap
An inflationary gap
The term liquidity refers to:
The ease with which an asset can be converted into cash without loss of value
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
If the nominal interest rate is 5% and the inflation rate is 3%, the real interest rate is:
8%
2%
3%
5%
The term fiscal policy refers to:
Government policies related to taxation and spending to influence the economy
Central bank policies related to interest rates and money supply
Policies aimed at regulating international trade
Policies related to the regulation of financial markets
If the government increases taxes and decreases government spending, it is implementing:
Contractionary fiscal policy
Expansionary fiscal policy
Contractionary monetary policy
Expansionary monetary policy
The term Phillips curve depicts the relationship between:
Inflation and unemployment
Government spending and taxes
Savings and investment
Consumption and income
The term consumer surplus refers to:
The difference between the highest price a consumer is willing to pay for a good and the price they actually pay
The difference between the cost of production and the price at which a good is sold
The total amount of money spent by consumers on goods and services
The total amount of money earned by consumers from their jobs
The term complementary input refers to inputs that are:
Used together in the production process
Used interchangeably in the production process
Completely unrelated in the production process
Unrelated to the production process
The term budget constraint refers to:
The limit on the total amount of money a consumer can spend
The limit on the total amount of money a government can borrow
The limit on the total amount of money a firm can invest
The limit on the total amount of money a central bank can print
The Phillips curve depicts the relationship between:
Inflation and unemployment
Government spending and taxes
Savings and investment
Consumption and income
Which of the following is a component of aggregate expenditure in the economy?
Government transfers
Taxes
Consumption
Imports
The term real wage rate refers to:
The purchasing power of wages after accounting for inflation
The nominal wage rate adjusted for taxes
The average wage rate in an economy
The wage rate set by the government
The term price elasticity of supply measures:
The responsiveness of quantity supplied to changes in price
The responsiveness of quantity demanded to changes in price
The responsiveness of consumer preferences to changes in price
The responsiveness of production costs to changes in price
The term trade surplus occurs when:
Exports exceed imports
Imports exceed exports
Both exports and imports are equal
Both exports and imports are zero
The term marginal revenue refers to:
The additional revenue earned from producing one more unit of a good or service
The total revenue earned by a firm
The total cost of producing a given quantity of a good or service
The additional cost of producing one more unit of a good or service
The term Laffer curve is used to illustrate the relationship between:
Tax rates and tax revenue
Government spending and economic growth
Inflation and unemployment
Interest rates and investment
The term velocity of money refers to:
The speed at which money changes hands in an economy
The total amount of money in circulation in an economy
The total amount of money held by households and businesses
The total amount of money held by banks as reserves
If the government implements contractionary fiscal policy, it will likely lead to:
Lower inflation and lower economic growth
Higher inflation and higher economic growth
Higher inflation and lower economic growth
Lower inflation and higher economic growth
The term deflation refers to:
A decrease in the overall price level of goods and services in an economy
An increase in the overall price level of goods and services in an economy
A decrease in the purchasing power of a currency
An increase in the purchasing power of a currency
If the economy is in a recessionary gap, it implies that:
Actual output is less than potential output
Actual output is greater than potential output
The inflation rate is high
The unemployment rate is low