The self-correcting tendency of the economy means that falling inflation eventually eliminates:

A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.


Answer: B

Economics

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What is the formula for the present value of $1 one year from now? If the rate of interest is 5 percent, what is the present value of $10 to be paid one year from now?

What will be an ideal response?

Economics

When a monopolist engages in perfect price discrimination,

A) the marginal revenue curve lies below the demand curve. B) the demand curve and the marginal revenue curve are identical. C) marginal cost becomes zero. D) the marginal revenue curve becomes horizontal.

Economics

Assume the short-run average total cost for a perfectly competitive industry increases as the output of the industry expands. In the long run, the industry supply curve will:

a. have a positive slope. b. have a negative slope. c. be perfectly horizontal. d. be perfectly vertical.

Economics

The national income and consumption data for the United States over the time period 1970–91 creates a consumption curve that runs through the origin. This differs from the consumption curve depicted by Keynes or by Duesenberry (MPC falling or remaining constant as income increases) which shows the curve beginning above the origin. The explanation is that

a. the consumption curve reflecting the data is a short-run consumption function b. the consumption curve reflecting the data is only meant to be an approximation to the reality of the Keynesian and Duesenberryian curves c. the Keynesian or Duesenberryian consumption curves are long-run consumption functions d. the consumption curve reflecting the data is a long-run consumption function e. autonomous consumption in the United States is equal to $0

Economics