The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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What do we need to assume about firms in the sticky price model?
A) They accommodate any demand at the given price. B) They hire until the real wage equals the average labor productivity. C) They maximize only current profits. D) They adapt the price to current conditions.
During periods of recession unemployment:
A. is more common. B. is less common. C. is uncorrelated to periods of recession. D. rates are the same for all groups of the working population.
The landmark antitrust case which established that size alone is not sufficient to prove an antitrust violation is the:
A. U.S. Steel case. B. Brown Shoe case. C. Von's Grocery case. D. ALCOA case.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, as the economy moves from Point A to Point E, the opportunity cost of motorcycles, measured in terms of hybrid cars
A. remains constant. B. decreases. C. initially increases, then decreases. D. increases.