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
You might also like to view...
If a corporate bond with face value of $8,000 has an interest rate of 4 percent paid once a year for a term of 30 years, what is the size of the coupon payment?
A) $320 B) $2,000 C) $8,000 D) $9,600
According to aggregate demand and supply analysis, the favorable supply shock of 1995-1999 had the effect of
A) increasing aggregate output, lowering unemployment, and raising inflation. B) decreasing aggregate output, raising unemployment, and raising inflation. C) increasing aggregate output, lowering unemployment, and lowering inflation. D) decreasing aggregate output, raising unemployment, and lowering inflation.
The demand curve for loanable funds is downward sloping because: a. people save more at higher interest rates
b. more investments are profitable at low interest rates than at high interest rates. c. future income is more valuable now at higher interest rates than at lower interest rates. d. usury laws increase the quantity of funds demanded at low interest rates but do not affect the quantity of funds demanded at high interest rates.
You enter a classroom, which is littered with newspapers. This is because
A. students do not pay for littering. B. it is a way to protest against the tuition rates. C. students are too lazy to clean up. D. maintenance people only clean once a day.