For policymakers, the problem with a recessionary gap is ________ and the problem with an expansionary gap is ________.
A. an increase in cyclical unemployment; an increase in structural unemployment
B. an increase in structural unemployment; an increase in cyclical unemployment
C. wasted resources; a tendency for inflation to increase
D. a tendency for inflation to increase; wasted resources
Answer: C
You might also like to view...
All else equal, a decrease in the rate of inflation ________ aggregate spending and ________ short-run equilibrium output.
A. decreases; decreases B. increases; increases C. decreases; increases D. increases; decreases
Suppose that there are only two types of used cars, peaches and lemons and that used cars are pure experience goods. Peaches are worth $10,000, and lemons are worth $6,000. Three fourths of all used cars are peaches, and one fourth are lemons
In a market with no signals, for instance, a market without warranties, the average value of cars actually sold will be A) $6,000. B) $7,000. C) $9,000. D) $10,000.
Prior to agreeing to join NAFTA, Mexico had followed a free trade policy for more than 30 years
Indicate whether the statement is true or false
For each watch Denmark produces, it gives up the opportunity to make 50 pounds of cheese. Germany can produce one watch for every 100 pounds of cheese it produces. Which of the following is true concerning comparative advantage between the two countries?
a. Denmark has the comparative advantage in watches and cheese. b. Germany has the comparative advantage in watches and cheese. c. Germany has the comparative advantage in watches. d. Denmark has the comparative advantage in watches. e. Denmark has the comparative advantage in cheese.