The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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If a competitive firm cannot earn profit at any level of output during a given short-run period, then which of the following is LEAST likely to occur?
A) It will shut down in the short run and wait until the price increases sufficiently. B) It will exit the industry in the long run. C) It will operate at a loss in the short run. D) It will minimize its loss by decreasing output so that price exceeds marginal cost.
Which of the following would lead to a rightward shift in the demand curve for golf balls?
a. An increase in the price of golf clubs b. A decrease in the popularity of golf c. An increase in the number of golfers d. A decrease in the price of golf balls e. An increase in the golf club membership fee
The twelve regional Federal Reserve banks are responsible for:
A. Accepting deposits from nonbank businesses. B. Providing currency to other countries. C. Lending money to individuals. D. Lending reserves to private banks.
GDP uses the market value of goods and services because it:
A. provides the opportunity to compare lists of outputs to see who produced more. B. markets are the only way to value goods and services. C. provides a common valuation that allows us to compare one economy to another. D. is the only data that can be gathered about goods and services.