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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When a credit card company offers different services with its card, like travel insurance for air travel tickets purchased with the credit card or product insurance for items purchased with the card, the credit card company is trying to
A) shift the demand curve for competing firms to the right. B) create a perfectly competitive market in which to sell its credit card. C) create a barrier to entry for competing firms. D) convince customers that its card has greater value than those offered by rival firms.
It was illegal for Microsoft to contract with computer manufacturers to pay for Microsoft operating systems for all the computers they produced, rather than paying for only the computers on which Microsoft operating systems were installed
Indicate whether the statement is true or false
Market consumer surplus at any quantity -- measured in dollars -- is the area above the market demand curve and below the market price
a. True b. False
When a market is corrected for externalities, it:
A. is equitable and makes everyone better off. B. is efficient and maximizes surplus. C. needs government regulation to maintain. D. All of these statements are true.