The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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If the marginal social cost of a television exceeds the marginal social benefit of a television, it would increase society's total surplus to decrease production of televisions
Indicate whether the statement is true or false
The neoclassical counter-revolution school supports
a. trade restrictions. b. state-owned enterprises. c. eliminating government regulations. d. limitations on foreign investors.
U.S. government bonds have no default risk because
A) they are issued in strictly limited quantities. B) the federal government can increase taxes or print money to pay its obligations. C) they are backed with gold reserves. D) they can be exchanged for silver at any time.
Blanca has her choice of either a certain income of $20,000 or a gamble with a 0.5 probability of $10,000 and a 0.5 probability of $30,000. The expected value of the gamble:
A) is less than $20,000. B) is $20,000. C) is greater than $20,000. D) cannot be determined with the information provided.