When an economy's actual output is smaller than its potential at some point in time, we say that it is experiencing:
A. a positive output gap.
B. a negative output gap.
C. inflation.
D. deflation.
B. a negative output gap.
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The term "path dependence" refers to
a. inefficient outcomes that result from early technology choices that are not optimal in the long run. b. the tendency for competitive markets to become monopolistic in the long run. c. inefficient outcomes that result from negative externalities. d. the natural growth of monopoly when economies of scale exist in a market.
Suppose Frank likes to snack on sugary candy. Frank knows that it's bad for his teeth to eat sugary candy, but he doesn't care. Frank's snacking habits have no impact on anyone other than Frank. In this case, Frank's consumption of sugary candy generates:
A. a positive externality. B. a negative externality. C. neither a positive nor a negative externality. D. both a positive and a negative externality.
If you want a say in the management of a corporation, you should buy
A. preferred stock. B. either bonds or preferred stock. C. common stock. D. bonds.
How does GDP deal with a Toyota produced in Kentucky?
A. It is not counted at all. B. Is counted at twice the value. C. It is partially counted. D. It is fully counted.