The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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The market value of all domestically produced final goods and services are also equal to the total amount spent by ________ less spending on imported goods and services.
A. households, firms, and governments B. households, firms, and the foreign sector C. households, firms, governments, and the foreign sector D. households and firms
Explicit agreements between businesses to keep prices high:
A. are illegal. B. are called collusion. C. are not in the public's best interests. D. All of these statements are true.
When the official price for goods and services is below the equilibrium price in a market, prices no longer perform their rationing function efficiently
a. True b. False Indicate whether the statement is true or false
The three-step procedure for economic analysis
a. works better in macroeconomics than in microeconomics b. begins with characterizing the market c. helps governments decide how to change the market equilibrium d. focuses on goals and constraints e. is used only in microeconomics