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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Which of the following products would be sold in a competitive market?
A) smartphones B) shoes C) Brent crude oil D) motorcycles
The main reason why the traditional classical school ceased to be widely accepted was that: a. it did not reflect the realities of the modern economy. b. when Keynes received the Nobel Prize, the academic establishment started believinghis ideas
c. it could not explain the persistence of the high levels of unemployment seen during the Great Depression. d. it was too abstract to be completely understood. e. it could not explain the relationship between inflation and unemployment.
In the long run, monopolistically competitive firms have:
A. excess capacity. B. positive profits. C. minimal average costs. D. homogeneous production.
In markets with imperfect information:
A. buyers and sellers will use resources to acquire information before making decisions. B. buyers will use resources to acquire information before making a decision, but sellers do not need to acquire additional information before making a decision. C. sellers will use resources to acquire information before making a decision, but buyers do not need to acquire additional information before making a decision. D. neither buyers nor sellers will be able to acquire information in order to make decisions.