The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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According to your text, when people talk about "the economy", they probably have in mind
A) the stock market. B) commercial society in general. C) the marriage market. D) black markets.
The SMarT program is designed to overcome which common barrier to saving?
A. Status-quo bias B. An unwillingness to forgo current consumption C. The program was designed to overcome both A and B. D. The program was designed to overcome neither A nor B.
Which of the following is an observation made by economist Michael Kremer?
a. World growth rates increased as the population increased. b. Technological progress allows for increasing population because of advances in agriculture. c. World population is growing so rapidly that soon it will outstrip natural resources and our standard of living will decline. d. All of the above are observations made by Kremer.
Which of the following is an argument against trying to use policy to stabilize the economy?
a. Recessions represent a waste of resources. b. Pessimism on the part of households and firms may become a self-fulfilling prophecy. c. "Leaning against the wind" requires policymakers to increase aggregate demand in recessions and reduce aggregate demand in booms. d. Macroeconomic forecasting is not developed sufficiently to allow policymakers to change aggregate demand at the proper time.