Recessionary gaps are most likely to be accompanied by
a. inflation.
b. inventory reductions.
c. unemployment.
d. expanding output.
c
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An economy can have an abundant supply of labor, capital, and natural resources but still produce goods and services inefficiently
Indicate whether the statement is true or false
Consider two countries: Eastland and Westland. Eastland's long-run Phillips curve sits further to the right than does Westland's long-run Phillips curve. Eastland and Westland are identical in all other ways. In particular, they have the same money supply growth rates. In the long run, compared to Westland, which of the following will we observe in Eastland?
a. higher unemployment and higher inflation. b. higher unemployment and the same rate of inflation. c. lower unemployment and higher inflation. d. None of the above is correct.
A. Draw a production possibilities frontier for a country that produces two goods, wine and cheese. Assume that resources are not equally suited to both tasks
b. Define opportunity costs. c. Use your production possibilities frontier graph to demonstrate the concept of opportunity costs. What will be an ideal response?
Price controls:
A. allow a market to reach equilibrium. B. prevent a good from being bought or sold. C. are regulations that sets a maximum or minimum legal price for a particular good. D. All of these are true.