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

Economics

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Theory suggests that stock prices should be positively related to

A) government borrowing. B) the unemployment rate. C) the interest rate. D) the money supply.

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Which of the following is not held constant in the short run when determining the aggregate supply curve?

a. Interest rates b. Rent c. Wages d. Profit e. Price level

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Loans made between borrowers and lenders are:

A. usually not taxable at the federal level. B. legal only in the state of origination. C. assets of the borrowers. D. assets of the lenders.

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Refer to the above figure. From the standpoint of society, the optimal output is

A. Q1 B. Q2 C. Q3 D. Q4

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