The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
You might also like to view...
The Federal Reserve responded to the 2008 financial crisis in several ways. Which of the following is not one of the ways the Fed responded?
A) The Fed lent investment banks Treasury securities in exchange for mortgage-backed securities. B) The Fed lowered the required reserve ratio on demand deposit accounts in order to increase the amount of bank reserves. C) The Fed helped JP Morgan to acquire Bear Stearns, a nearly bankrupt investment bank. D) The Fed made investment banks eligible for discount loans.
The text considers three methods that can be used to obtain empirical estimates of long-run costs in different industries
Of those three, surveys of expert opinion are considered to be most reliable because they are less subject to bias than the other two methods. Indicate whether the statement is true or false
A competitive equilibrium is Pareto efficient because at the competitive equilibrium,
A) prices have been allowed to adjust. B) there are no further gains from trade. C) the final outcome is different from the original inefficient endowment. D) all members of society can be made better off.
Characteristics shared by monopolistically competitive markets and monopoly markets include: a. strategic interactions among sellers
b. many sellers. c. firms facing a downward-sloping demand curve. d. insignificant barriers to entry.