When the difference between potential GDP and actual GDP increases, the nation usually suffers from increased inflation
a. True
b. False
Indicate whether the statement is true or false
False
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Economists began to lose confidence in the Phillips curve during the
Economists often evaluate a theory in terms of how consistently and accurately it predicts what happens. Implicit in this position is the belief that
A) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory is a good explanation of how things work. B) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory will be accepted by others. C) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory's assumptions (even if they initially seem unrealistic) capture something that is essential to explaining what it is that the theory is trying to explain. D) all of the above
It is the custom for paper mills located alongside the Layzee River to discharge waste products into the river. Operators of hydroelectric generating plants on the river find they must clean up the river's water before it flows through their equipment. Refer to the above information. If nothing is done to correct this situation:
A. the price of electricity will be lower than it should be. B. there will be an overallocation of resources to the production of electricity. C. there will be an overallocation of resources to the production of paper goods. D. there will be an underallocation of resources to the production of paper goods.
Recall the Application about using value added to measure the size of Walmart to answer the following question(s). When measuring the true contribution of Walmart to the U.S. economy, we must use the value of Walmart's total sales.
Answer the following statement true (T) or false (F)