The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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The schedules in the table give the marginal social benefit and marginal social cost of a DVD. If the number of DVD produced is cut to 2 a week, then the ________
A) minimum supply-price of the second DVD is $18 B) price is $18 a DVD C) opportunity cost of the second DVD is $22 D) value of the second DVD is $20
Which of the following government activities is motivated by a concern about efficiency? Check all that apply.
A. Breaking up Standard Oil (which once owned 90% of all oil refineries) into several smaller companies B. Imposing higher personal income tax rates on people with higher incomes C. Providing some poor people with vouchers that can be used to buy food D. Regulating cable TV prices E. Prohibiting smoking in public places F. Instituting laws against driving while intoxicated
In the year 2009 we run a trade deficit of _______ billion.
A. $900 billion B. $700 billion C. about $500 billion D. about $400 billion
________ seem as a group to be mildly regressive and ________ seem as a group to be mildly progressive.
A. Federal and state taxes; local taxes B. Federal taxes; state and local taxes C. State and local taxes; federal taxes D. Local taxes; federal and state taxes