Which of the following would be most likely to improve the standard of living of a less-developed country?
a. development of strong labor unions
b. more foreign investment, attracted by the expectation of economic and political stability
c. adoption of trade barriers (higher tariffs and quotas)
d. widespread use of price controls to allocate goods and resources
B
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
Equilibrium expenditure is the level of expenditure at which
A) aggregate planned expenditure minus planned changes in inventories equals real GDP. B) aggregate planned expenditure plus planned changes in inventories equals real GDP. C) firms' inventories are zero. D) firms produce more output than they sell. E) firms' inventories are at the desired level.
Assuming the economy is starting at the natural rate of output and everything else held constant, the effect of ________ in aggregate ________ is a rise in both inflation and output in the short-run,
but in the long-run the only effect is a rise in inflation. A) a decrease; supply B) a decrease; demand C) an increase; supply D) an increase; demand
Describe the differences between frictional, cyclical, and structural unemployment