The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market
If Kevin trains 5 clients per day, he will ________ his profit and will ________. A) maximize; earn normal profit B) not maximize; earn a normal profit anyway C) maximize; earn an economic profit D) not maximize; earn an economic profit anyway E) not maximize; incur an economic loss
The demand for money rises. According to the Keynesian transmission mechanism, the interest rate __________, investment spending __________ (assuming it is interest-sensitive), the AD curve shifts to the __________ and if the AS curve is horizontal, Real GDP __________
A) rises; falls; left; rises B) falls; rises; right; does not change C) rises; falls; right; rises D) falls; falls; left; does not change E) rises; falls; left; falls
If a person has an absolute advantage in some activity, she must have a comparative advantage in that activity as well.
Answer the following statement true (T) or false (F)
Which of the following transactions will decrease the U.S. current account deficit?
A. A U.S. corporation builds a new factory in Seoul, South Korea. B. Dutch tourists visiting Los Angeles. C. U.S. department stores buy shoes from Italy. D. American firms invest in Tokyo real estate.