Economists believed that the U.S. economy had a (n) ____ in 2006 and 2007
a. mild recession
b. small recessionary gap
c. small inflationary gap
d. deflationary gap
c
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Starting on a Phillips curve with expected inflation equal to 5% and unemployment at its natural rate, show what happens to unemployment if the Fed tries to reduce inflation, but has no credibility
As time passes and people realize that the inflation rate is now lower, what happens to the short-run Phillips curve?
From 1900 to 2013, real GDP per person has had two important attributes
A) It has grown substantially over time and there are small differences from country to country. B) It has grown unevenly over time in the U.S. but it has grown substantially. C) It has grown evenly over time in the U.S. and there are huge differences from country to country. D) It has fluctuated around a trend in the U.S. but it has not grown much for all the Southeast Asian countries. E) It has doubled in the U.S. but there have been many recession periods.
A plastics factory emits water pollutants into a nearby river
The marginal private cost of producing plastics is constant, the marginal external cost of the pollutants increases with the quantity of plasticis, and the demand for plastics is downward sloping. What happens to the socially optimal level of output and market price if the marginal external cost curve shifts upward? A) Optimal price and quantity decrease B) Optimal price increases, optimal quantity remains unchanged C) Optimal price increases, optimal quantity decreases D) Optimal price and quantity decline
If the demand for new automobiles falls when income falls, automobiles are said to be normal goods
a. True b. False