In the long run, output gaps are eliminated by:
A. reducing potential output.
B. increasing potential output.
C. increased efficiency in labor markets.
D. price changes.
Answer: D
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Which form of business organization is the least common in the United States?
a. sole proprietorship b. partnership c. corporation d. nonprofit organization e. conglomerate
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
The ability to produce a good using fewer resources than someone else is called
A) absolute advantage. B) comparative advantage. C) specialization. D) protectionism.
Real demand for money is positively related to the level of real income in the economy
Indicate whether the statement is true or false