An equilibrium point beyond a potential GDP is termed as
A. deflationary gap.
B. recessionary gap.
C. inflationary gap.
D. acceleration gap.
Answer: C
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The demand for a good is more price elastic
A) if closer substitutes are available. B) if the good is a necessity rather than a luxury. C) if the share of the good in the average consumer's budget is smaller. D) in the short run than in the long run.
A defined benefits plan
A) is always fully funded. B) may be underfunded but cannot be overfunded. C) may be overfunded but cannot be underfunded. D) may be either underfunded or overfunded.
One advantage of a negative income tax is _____
a. it minimizes the deadweight loss from taxation b. leisure becomes an inferior good c. it is identical to an in-kind payment in terms of utility d. it is easy to administer
How does the “invisible hand” work in a competitive market system?
What will be an ideal response?