In the above figure, the long-run equilibrium real GDP is
A. $10 trillion.
B. $11 trillion.
C. $12 trillion
D. not displayed.
Answer: B
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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.
In a centrally planned economy, resources are allocated primarily in accordance with directives from government agencies.
Answer the following statement true (T) or false (F)
Which of the following cultural events likely increased the demand for the associated product?
A) the banning of cigarette advertising on television B) the inclusion of Reese's Pieces in the movie E.T. C) increased environmental awareness about the impacts of sport utility vehicles (SUVs) D) concerns over "Mad Cow" disease in beef
Stagflation usually results from
A) a supply shock. B) a decrease in aggregate demand. C) an increase in aggregate supply. D) an increase in aggregate demand.