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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Because of the multiplier effect, ________ changes in government spending or taxation can cause ________ changes in real GDP.
A. small; large B. small; small C. large; small D. large; large
Elasticity of demand is calculated by dividing the change in quantity by the change in the price of a good.
Answer the following statement true (T) or false (F)
In the long run, the output of a monopolistically competitive firm
a. exceeds that of an otherwise similar perfectly competitive firm b. is less than that of an otherwise similar perfectly competitive firm c. is at the point at which LRAC is minimized d. equals that of an otherwise similar perfectly competitive firm e. is less than that of an otherwise similar monopolist
Firms have started to use ____ to solicit information about event that are important to them
A) internal markets B) external networks C) prediction markets D) none of these choices.