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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In a market system, self-interest motivates most people to
A) remain self-sufficient. B) avoid paying insurance premiums. C) provide products for other people. D) rely on government central planning.
What is the formula for the present value of $1 one year from now? If the rate of interest is 5 percent, what is the present value of $10 to be paid one year from now?
What will be an ideal response?
If a shoe monopoly experiences an outward shift in its demand curve, the industry demand curve for shoes must have
a. shifted slightly less b. been flat to begin with c. shifted slightly more d. shifted more quickly e. made the exact same shift
A factory worker earned $10 an hour in 1980. The CPI was 0.82 in 1980. The same factory worker was earning $15 an hour in 1990 when the CPI was 1.31. From 1980 to 1990, the factory worker's hourly real wage:
A. increased from $10 to $15. B. remained constant. C. decreased from $12.20 to $11.45. D. increased from $7.63 to $18.29.