The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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A business firm should refuse to sell any item for which it cannot obtain a price at least as large as what
A) it cost the firm to produce the particular item. B) it costs the firm on average to produce the item. C) it would cost the firm to produce another item identical to the item being sold. D) the item will be worth to the firm if not sold.
In a call options contract, the
A) seller has the obligation to deliver the instrument at a specified time. B) buyer has the obligation to receive the instrument at a specified time. C) seller may choose whether or not to deliver the instrument at a specified time. D) buyer will choose to exercise his option only if the value of the underlying security falls.
Figure 5-4
Refer to . The inefficient equilibrium price and quantity are
a.
$1.90 and 38 units, respectively.
b.
$1.80 and 35 units, respectively.
c.
$1.60 and 42 units, respectively.
d.
$1.35 and 58 units, respectively.
According to the developing government argument, tariffs imposed by a developing country
A. benefit the country because they represent an efficient mechanism for the country's rulers to obtain funds for their personal use. B. can benefit the country by creating net social gains. C. are likely to represent only a very small fraction of government revenues because the volume of imports in developing countries is relatively small. D. will be as inefficient as tariffs imposed by developed countries.