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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The quantity of labor demanded by the firm is such that the
A) wage rate equals the marginal cost. B) wage rate equals the value of marginal product of labor. C) wage rate equals the marginal product of labor. D) marginal revenue equals the marginal product.
For which of the following nations does international trade account for the largest percentage of GDP?
a. Japan b. The Netherlands c. Germany d. Great Britain e. the United States
For a government, the appropriate Keynesian response to a recessionary gap is to increase government spending
a. True b. False Indicate whether the statement is true or false
Assume the United States can use a given amount of its resources to produce either 20 airplanes or 8 automobiles and Japan can employ the same amount of its resources to produce either 20 airplanes or 10 automobiles. The U.S. should specialize in:
A. airplanes. B. automobiles. C. both goods. D. neither good.