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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Consider the demand curves for soft drinks shown in the figure above. Suppose the economy is at point a. Which of the following could result in a movement to point c?
A) a decrease in income B) an increase in the relative price of a soft drink C) a decrease in the relative price of a soft drink D) a decrease in the price of bottled water
Which of the following explains why the marginal cost curve has a U shape?
A) Initially, the marginal product of labor falls, then rises. B) Initially, the average product of labor rises, then falls. C) Initially, the marginal product of labor rises, then falls. D) Initially, the average cost of production rises, then falls.
Refer to the information provided in Figure 6.1 below to answer the question(s) that follow.
Figure 6.1Refer to Figure 6.1. Tom's budget constraint is AC. His choice set includes all points
A. along the vertical and horizontal axes. B. along budget constraint AC. C. bounded by the area OAC. D. to the right of budget constraint AC.
Refer to Figure 11-4. Suppose the per-worker production function in the figure above represents the production function for the U.S. economy
If the United States decided to cut its support of university research in half, this would cause a movement from A) B to E. B) B to D. C) B to A. D) B to C.