The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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During the Great Depression, the unemployment rate for the United States peaked at approximately
A) 10%. B) 70%. C) 45%. D) 25%.
If the graph shown is displaying a competitive labor market:
A. S would represent an individual worker's supply of labor at each wage.
B. S would represent the firm's supply of jobs at each wage.
C. P* would represent the equilibrium wage.
D. Q* would represent the equilibrium wage.
Paul Volcker, former chair of the Fed, implemented
a. contractionary policy which increased the popularity of the U.S. president who had appointed him. b. contractionary policy which decreased the popularity of the U.S. president who had appointed him. c. expansionary policy which increased the popularity of the U.S. president who had appointed him. d. expansionary policy which decreased the popularity of the U.S. president who had appointed him.
Suppose that when a firm produces the level of output at which price equals marginal cost, the firm's total revenue is less than its variable cost. In this case, the firm should:
A. purchase more fixed factors of production. B. shut down. C. produce more so that its total revenue increases. D. not change its level of output even if it's earning an economic loss in the short run.