The Conclusion of a Study by Steven Davis and James

question 22

Multiple Choice

The conclusion of a study by Steven Davis and James Kahn is that:

• A) inflation is super-super neutral in the long run.
• B) the saving rate in the Solow model does not contribute to economic growth.
• C) the Phillips curve is flat.
• D) the output gap is consistently more volatile than most economists and policymakers believe.
• E) improvements in inventory management have reduced macroeconomic volatility.

---

Definitions:

Excise Tax

A tax imposed on the sale of specific goods and services, such as fuel, tobacco, and alcohol.

Burden

The negative impact, stress, or obligation imposed by a situation, decision, or policy.

Efficiency Loss

The decrease in economic efficiency resulting from the inability to reach or achieve the equilibrium for a product or service.

Sacrificed Output

The production or output that is given up as a consequence of choosing one option over another, often discussed in opportunity cost analysis.