To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:

A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.


Answer: C

Economics

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Michigan Radio is the state's most listened-to public radio service, attracting approximately 400,000 listeners each week and is funded through listener donations

If Michigan Radio suffers from the free-rider problem then the market would provide an ________ quantity of the public good. A) efficiently small B) efficiently large C) inefficiently small D) inefficiently large

Economics

You bake cookies. One day you double the time you spend, double the number of chocolate chips, flour, eggs, and all your other inputs, and bake twice as many cookies. Your cookie production function has

a. decreasing returns to scale. b. zero returns to scale. c. constant returns to scale. d. increasing returns to scale.

Economics

Which of the following policies would be advocated by proponents of stabilization policy when the economy is experiencing severe unemployment?

a. a decrease in the money supply b. an increase in tax rates c. an increase in government purchases d. an increase in interest rates.

Economics

An increase in demand and a decrease in supply, will lead to a(n) ________ in equilibrium quantity and a(n) ________ in equilibrium price.

A) decrease; decrease B) indeterminate change; increase C) indeterminate change; decrease D) increase; indeterminate change

Economics