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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The above figure illustrates a perfectly competitive firm. Curve B represents the
A) MR curve. B) ATC curve. C) MC curve. D) AVC curve. E) AFC curve.
If a tariff is imposed on imports of shrimp into the United States, U.S. producer surplus from shrimp will ________ and U.S. total surplus from shrimp will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease E) increase; not change
Domestic currency depreciation will:
A) help domestic firms that export and hurt domestic firms that import. B) help domestic firms that import. C) hurt domestic firms that export and help domestic firms that import. D) hurt domestic firms that export.
The Earned Income Tax Credit (EITC)
A. provides more income to those people on welfare. B. is a tax on low income workers. C. provides additional tax credits to low income workers. D. is a tax break for the wealthiest Americans.