MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) The negative relationship between unemployment and inflation is known as the A) aggregate supply curve. B) aggregate demand curve. C) efficiency wage line. D) Phillips curve. 2) Friedman and Phelps suggested that there should not be a stable relationship [...]
Demand-Pull inflation is caused when people have too much money to spend on a scarce amount of goods. For example, if the government were to increase the minimum wage to 15 dollars and hour then everyone would have more money. But more money does not mean that there are more goods or resources to produce [...]
Every economic system must answer these five questions effectively or the system itself is ineffective. 1. What goods does the economy produce? For capitalism the answer is simply “Whatever the people are willing to buy.” Since capitalism is driven solely by self interest anything that can be produced at a profit will be produced. In [...]