When a recessionary gap exists, actual output ________ potential output and the rate of inflation will tend to ________.
A. is less than; increase
B. is less than; decrease
C. exceeds; increase
D. exceeds; decrease
Answer: B
You might also like to view...
Division of labor has caused output to rise dramatically since the industrial revolution.
Answer the following statement true (T) or false (F)
If the CPI basket costs $35 in the base period but costs $42, what is the CPI in the next period?
A) 83.3 B) $42 C) 20 percent D) 120
Which of the following is not a determinant of elasticity?
a. availability of substitutes b. share of the consumer's budget spent on the amount c. duration of the adjustment period d. the location of the product
Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million.To OPEC, the payoff to abiding by the agreement is either:
A. $175 million or $185 million. B. $60 million or $100 million. C. $200 million or $185 million. D. $150 million or $200 million.