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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The table above shows some data that describe Tom's T-Shirts' total product when Tom's has 1 sewing machine. Diminishing marginal returns begin when the ________ is employed
A) second worker B) fifth worker C) fourth worker D) third worker
If a perfectly competitive firm adopts a new technology, greater economic profit is possible in the ________, but a competitive return will be earned in the ________ as the market supply will ________.
A) long run; short run; decrease B) short run; long run; increase C) short run; long run; decrease D) long run; short run; increase
A natural monopoly exists if: a. several former competitors merge to become the only producer in the industry
b. average cost of production is lowest when only one firm produces the entire industry output. c. one firm controls the supply of an essential input used by the industry. d. a firm has a patent or copyright.
If a firm's short-run total cost curve lies above its total revenue curve at all output levels, the goal of the firm should be to
a. minimize total cost b. maximize total revenue c. minimize its loss d. minimize marginal cost e. maximize marginal revenue