Many economists think that, in the long run, the economy generally tends to move toward:
a. an accelerating inflation rate
b. a stable price level.
c. the natural or full-employment rate of inflation.
d. the natural or full-employment rate of unemployment.
d
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If the economy is currently operating below its institutional production possibilities frontier (institutional PPF), it is
A) in long-run equilibrium. B) in a recessionary gap. C) in an inflationary gap. D) definitely not self-regulating. E) b and d
The debate over how governments should respond to deep economic downturns is difficult to resolve with hard empirical evidence because:
A. deep economic downturns are rare events, so there isn't a lot of relevant data. B. there's so much data that it's difficult to draw meaningful conclusions. C. few economists are interested studying economic downturns. D. most economists are only interested in economic theory.
Recent international trade agreements such as NAFTA have reduced tariffs and import quotas between the U.S. and its trading partners. Reduction of barriers to international trade are likely to
a. shift the U.S. production possibilities curve outward. b. allow U.S. citizens to consume combinations of goods and services that lie above points on the U.S. production possibilities curve. c. reduce jobs in all U.S. industries. d. raise prices.
Refer to the above figure. Which panel represents the long-run situation for a monopolistically competitive firm?
A. Panel A B. Panel B C. Panel C D. Panel D