The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Refer to Scenario 7.3. When Q = 200, what is the marginal cost?
A) 0 B) 5 C) 10 D) 15 E) 25
The short-run aggregate supply (SRAS) curve represents the relationship between
A) the price level and the real Gross Domestic Product (GDP) without full adjustment or full information. B) the price level and the real Gross Domestic Product (GDP) without full adjustment but with full information. C) the price level and the nominal Gross Domestic Product (GDP). D) the decisions of producers and the decisions of consumers.
Dividing the change in total revenue by the change in labor gives:
a. marginal product of labor. b. marginal revenue product of labor. c. the price of the output. d. demand for the output. e. economic efficiency.
One advantage about an emissions permit system is that
a. it creates a "license to pollute," sure to be popular with environmentalists. b. it reduces uncertainty about the quantity of pollution that will be emitted. c. it is a direct control system and avoids the inefficiencies of a market. d. permits can be handed out on the basis of need to protect firms from high costs.