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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If this year's price level is 126 and last year's price level was 120, the inflation rate is ________
A) 0.95 percent a year B) 5 percent a year C) 6 percent a year D) 1.05 percent a year
Either supply shocks or adjusting inflation expectations can shift the short run Phillips curve
a. True b. False Indicate whether the statement is true or false
When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease. B. prices, causing them to definitely rise. C. output, causing it to definitely increase. D. prices, causing them to definitely fall.
The measure or value upon which a tax is levied is the
A. tax incidence. B. tax structure. C. tax base. D. tax rate.