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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Rent controls are designed to protect consumers from high rents.
Answer the following statement true (T) or false (F)
The process of asset transformation refers to the conversion of
A) safer assets into risky assets. B) safer assets into safer liabilities. C) risky assets into safer assets. D) risky assets into risky liabilities.
An upward-sloping supply curve of labor implies that
a. any quantity of workers can be hired at the same wage rate b. a higher wage rate is required to attract more laborers c. there is an excess supply of labor in the labor market d. the total labor cost curve is horizontal e. the marginal physical product curve of labor must also be upward sloping
Because of the free-rider problem,
a. private markets tend to undersupply public goods. b. the federal government spends too many resources on national defense and not enough resources on medical research. c. fireworks displays have become increasingly dangerous. d. poverty has increased.