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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One basic difference between "land" and "capital" resources is that land is
A. a gift of nature, while capital is manufactured. B. manufactured, while capital is a gift of nature. C. unlimited, while capital is limited. D. limited, while capital is unlimited.
An unexpected rise in the LEI should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
Is price discrimination always legal in the United States?
A. No, while price discrimination is legal throughout the country, it is not allowed if it is used to drive rivals out of business. B. Yes, a firm can price discriminate as long as it benefits them. C. No, price discrimination is discrimination, and its practice is never allowed in the United States. D. No, price discrimination is not legal in some states like California and Nebraska.
When an external cost exists in the production of a good, firms tend to
A. over-produce the good. B. keep production constant throughout the year. C. under-allocate resources to the production of the good. D. under-produce the good since society pays these costs.