Yesterday,Casey received a cable company ad for bundled TV,telephone,and Internet service that cost appreciably more than what she is currently paying.At the same time,she received a notice from her utility company that summer rates would be increasing.Her school books are costing almost twice what they cost last year,and yesterday,gasoline cost her 30 cents more per gallon than it did last week.As she ponders the situation,she can't help but wonder how prices could be rising when so many people have lost their jobs and are cutting back on expenditures.She is certain that this situation characterizes her economics professor's description of stagflation.
Level of Learning 3: Application of principles

Question

Quizplus · Accepted Answer

The passage describes Casey's situation as experiencing rising prices even though people are cutting back on expenditures and there is a high unemployment rate. This is a characteristic of stagflation, and Casey is correctly applying the economic principle to her current situation.

Yesterday,Casey Received a Cable Company Ad for Bundled TV,telephone,and Internet