The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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If a firm is minimizing the cost of producing its chosen level of output, the marginal product of the last dollar spent on each input should be equal
Indicate whether the statement is true or false
Compared to the severe recession of 1981-1982, the growth of real GDP during the first two years of recovery from the 2008-2009 recession was
a. much more rapid and the unemployment rate fell by a smaller amount after the more recent recession. b. slower and the unemployment rate fell by a smaller amount after the more recent recession. c. more rapid but the unemployment rate fell by a smaller amount after the more recent recession. d. similar and the decline in the rate of unemployment was almost identical during the recovery from each of these recessions.
In the short run for a particular market, there are 5,000 firms. Each firm has a marginal cost of $7 when it produces 200 units of output. One point on the market supply curve is
a. quantity = 5,000 . price = $7. b. quantity = 35,000 price = $35,000. c. quantity = 1,000,000 . price = $7. d. quantity = 1,000,000 . price = $35,000.
Economists who believe in activist policymaking argue that
A. only planned changes in the money supply impact the economy. B. decreases in aggregate demand definitely impact the economy in the short run. C. decreases in aggregate demand impact the economy only in the long run. D. only increases in the minimum wage levels improve economic well-being.