An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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If the utility for two goods "x" and "y" can be measured as U = y, then it can be concluded that
A) "x" and "y" are perfect complements. B) "x" is a "bad". C) the indifference curves on the x,y graph are upward sloping where "x" is measured on the horizontal axis. D) the indifference curves on the x,y graph are horizontal where "x" is measured on the horizontal axis.
A country is using a proportional tax when
a. its marginal tax rate equals its average tax rate. b. its marginal tax rate is less than its average tax rate. c. its marginal tax rate is greater than its average tax rate. d. it uses a lump-sum tax.
Which of the following economic conditions cause export growth to be a basis for faster overall economic growth?
A) Diseconomies of scale in production for the domestic market B) A larger-than- average service sector C) A larger-than-average manufacturing sector D) High and constant levels of productivity in export production E) Economies of scale in production for the world market
The opportunity cost of a particular good tends to increase with its rate of output because some resources cannot be easily adapted from the production of one good or service to another
a. True b. False Indicate whether the statement is true or false