The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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In the production possibilities frontier depicted in the figure above, which of the following combinations of hats and bananas is inefficient?
A) 4 million pounds of bananas and 4 million hats B) 2 million pounds of bananas and 5 million hats C) 0 pounds of bananas and 6 million hats D) 1 million pounds of bananas and 3 million hats
If a country begins to import more of a commodity, one can normally expect the price of the commodity to
a. remain unchanged in that nation. b. rise and then fall below where it was originally. c. rise in that nation. d. drop in that nation.
In the early 2000s, Chinese officials indicted members of a forgery syndicate that sold several hundred diplomas to high school graduates who needed the diplomas to take employment tests. This situation, where having the certificate of knowledge is more important than the knowledge itself, is known as:
A. the brain drain. B. human capital. C. certification. D. credentialism.
Suppose that surplus labor in a Pakistani village is used to build a medical clinic and dig several wells. This is an illustration of:
A. foreign aid. B. capital-saving investment. C. in-kind investment. D. technological advance.