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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Consider the market for chicken. Assuming that chicken and beef are substitutes, an increase in the price of beef will:
a. decrease the demand for chicken creating a lower price and a smaller amount of chicken purchased in the market. b. decrease the supply of chicken creating a higher price and a smaller amount of chicken purchased in the market. c. increase the demand for chicken creating a higher price and a greater amount of chicken purchased in the market. d. increase the supply of chicken creating a lower price and a greater amount of chicken purchased in the market.
Buyers are able to buy all they want to buy and sellers are able to sell all they want to sell at a. prices at and above the equilibrium price
b. prices at and below the equilibrium price. c. prices above and below the equilibrium price, but not at the equilibrium price. d. the equilibrium price but not above or below the equilibrium price.
If people work longer or harder,
a. they are unambiguously worse off b. living standards will rise but nonmarket activities must be sacrificed c. living standards will fall d. more output can be produced, but living standards will fall e. they will have fewer consumer goods to enjoy
The classical quantity theory of money is based on
A. exchange rate theory. B. Say's law. C. the equation of exchange. D. Keynesian theory.