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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If the APC is 1.3, the APS is
A. -0.3. B. 0. C. 0.3. D. 0.7.
Goods that are neither rival in consumption nor excludable are:
A. a public good. B. an artificially scarce good. C. a common resource. D. a private good.
Under which of the following conditions will there be no substitution bias in the CPI?
A) Indifference curves are convex. B) Indifference curves are L-shaped. C) Indifference curves are linear. D) Indifference curves are downward sloping.
Refer to the data. If the market price for this firm's product is $24, it will produce:
A. 4 units at a loss of $150.
B. 6 units at a loss of $90.
C. 3 units at an economic profit of zero.
D. 4 units at a loss of $138.