Stagflation occurs when the economy experiences ?

Related Mcqs:

1. What is the meaning of the term stagflation ?

   A. Fall in prices due to less circulation of currency
   B. Fall in employment due to declining production
   C. High inflation rate combined with high unemployment and unchanged consume demand
   D. None of these

2. During Stagflation ?

   I- an increase in aggregate spending will eliminate the recession
   II- a decrease in aggregate spending will reduce inflation
   III- government faces contradictory goals
   IV- the central bank decease money supply to reduce inflation

   A. I and II only
   B. III and IV only
   C. I ,II and III only
   D. I , II , III, and IV

3. The amount of unemployment that the economy normally experiences is known as ?

   A. The natural rate of unemployment
   B. cyclical unemployment
   C. efficiency wage unemployment
   D. frictional unemployment

4. Experiences over the last three decades has suggested that in order for economic development to occur, it is necessary for an economy to ?

   A. stress agricultural development over industrial development
   B. promote industrial development over agriculture
   C. use a balanced strategy that promotes both agricultural and industrial development
   D. stress the importation of agricultural products and the export of manufactured goods

5. Suppose the economy is initially in long run equilibrium Then suppose there is a drought that destroys much of the wheat crop if policymakers allow the economy to adjust to long-run equilibrium on its own, according to the model to aggregate demand and aggregate supply what happens to prices and output in the long run ?

   A. Output rises; prices are unchanged from the initial value
   B. Output and the price level are unchanged from their initial values
   C. Output falls; prices are unchanged from the initial value
   D. Prices fall; output is unchanged from its initial value

6. Refers to Exhibit 4. Suppose the economy is operating in a recession such as point B in Exhibit 4. If policy makers allow the economy to adjust to the long run natural rate on its own, ?

   A. People will reduce their price expectations and the short run aggregate supply will shift right
   B. People will raise their price expectations and aggregate demand will shift left
   C. People will raise their price expectations and the short run aggregate supply will shift left
   D. People will reduce their price expectations and aggregate demand will shift right

7. Refer to Exhibit 6.If People in the economy expect inflation to be 6 percent but inflation turn out to be 3 percent the economy is operating at point ?

   A. H
   B. c
   C. d
   D. F

8. Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. In the long run a monetary contraction will move the economy in the direction of point ?

   A. F
   B. a
   C. H
   D. I

9. Refer to Exhibit 6. Suppose the economy is Operating in long-run equilibrium at point E. An unexpected monetary contraction will move the economy in the direction of point ?

   A. H
   B. F
   C. E
   D. c

10. An economy that trades with and has financial dealing with other countries is called a/an ________ economy?

    A. free-trade
    B. autarkic
    C. open
    D. mixed