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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To aggregate 300 tons of steel, 5,000 bushels of wheat, and 1 million barrels of crude oil, economists add together the ________ of the three products
A. number of tons, bushels, and barrels B. units C. weight D. dollar value
The central bank of the United States is:
A. the Federal Reserve System. B. Bank of America. C. Bank of the United States. D. the U.S. Treasury.
Refer to Figure 4-11. Suppose the market is initially in equilibrium at price P1 and then the government imposes a tax on every unit sold. Which of the following statements best describes the impact of the tax?
A) The consumer will bear a greater share of the tax burden if the demand curve is D2. B) The consumer will bear a greater share of the tax burden if the demand curve is D1. C) The consumer will bear the entire burden of the tax if the demand curve is D1 and the producer will bear the entire burden of the tax if the demand curve is D2. D) The consumer's share of the tax burden is the same whether the demand curve is D1 or D2.
During the financial crisis of 2007-2009, the proper policy response was
a. contractionary monetary and fiscal policy. b. contractionary monetary and expansionary fiscal policy. c. expansionary monetary and fiscal policy. d. expansionary monetary and contractionary fiscal policy.