When actual output equals potential output and the inflation rate is equal to the expected rate of inflation, the economy is said to be in ________ equilibrium.
A. recessionary
B. long-run
C. expansionary
D. short-run
Answer: B
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An individual who is suffering from money illusion is more concerned with
A) real prices than with nominal prices. B) nominal prices than with relative prices. C) relative prices than with nominal prices. D) relative prices than with real prices.
The government sometimes creates an excess demand for a product by setting a maximum price at which the product may be sold to consumers. This is sometimes called a
A) subsidy. B) price floor. C) tax. D) price ceiling.
Economic theory posits that a resource which is finite and being depleted will rise in price continuously, and demand will be reduced. In fact, a recent study, graphing the price behavior of lead, zinc and copper found that until about 2007, a. prices rose steadily, as predicted
b. prices dropped precipitously. c. prices remained remarkably stable. d. prices were up and down with no discernible pattern.
The key assumption for the general multiple regression model is that all factors in the unobserved error term be correlated with the explanatory variables.
Answer the following statement true (T) or false (F)