Which Statement Is True

question 105

Multiple Choice

Which statement is true?

• A)Scarcity is simply a lack of money.
• B)Our society has been so affluent in the last 50 years that scarcity is only a minor problem.
• C)The economic problem refers to the problem of poverty.
• D)If scarcity did not exist there would be no need to economize.

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Definitions:

Inflation Rate

The speed at which the average price level of goods and services increases, leading to a decrease in buying power.

Long-Run Aggregate Supply

The total output of goods and services that an economy can produce when both labor and capital are fully employed, at full capacity.

Long-Run Phillips Curve

A macroeconomic concept that suggests there is no long-term trade-off between inflation and unemployment, implying that in the long run, the economy reaches a natural rate of unemployment regardless of inflation.

Natural Rate

The natural rate often refers to the natural rate of unemployment, which is the level of unemployment consistent with a stable inflation rate over time.