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 percentage of deposits that banks must hold as reserves is called the
A) percentage rate. B) required reserve ratio. C) Fed rate. D) discount rate.
A project whose acceptance eliminates another project from consideration is called
A) independent. B) mutually exclusive. C) replacement. D) complementary.
As a student, one of the costs of sleeping in rather than going to class is likely to be a lower grade in the class.
Answer the following statement true (T) or false (F)
Consider an unregulated monopoly in Figure 8.13. Suppose that a second firm enters the market. As a result, if a natural monopoly is inevitable in this market:
A. the demand curve facing each firm lies entirely above the long-run average cost curve. B. the demand curve facing each firm lies entirely below the long-run average cost curve. C. the demand curve facing each firm touches the long-run average cost curve at one point. D. None of these