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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To determine who bears the greater share of a tax, we compare the
A) number of buyers to the number of sellers. B) elasticity of supply to the elasticity of demand. C) size of the tax to the price of the good. D) government tax revenue to the revenue collected by the suppliers. E) pre-tax quantity to the post-tax quantity.
Which of the following statements about the financial crisis that began in 2008 is true?
A) It was a great illustration of how interdependent national economies are. B) Most economists agree that it originated in China. C) It only lasted 3 weeks. D) It only affected housing markets.
If a union is successful in negotiating a wage rate which is above the market clearing wage, then which of the following would not occur?
A) The higher wages attract more workers leading to a shortage of jobs. B) Management may replace part of the workforce with machinery. C) To handle the surplus of labor the union will form a closed shop. D) The union may shift the supply of labor curve by developing methods to ration jobs.
Suppose an American worker can make 20 pairs of shoes or grow 100 apples per day. On the other hand, a Canadian worker can produce 10 pairs of shoes or grow 20 apples per day. Canada has the ________ opportunity cost of a pair of shoes than the United States, so: ________.
A. higher; Canada should specialize in apple production B. higher; Canada should specialize in shoe production C. lower; Canada should specialize in apple production D. lower; Canada should specialize in shoe production