The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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Refer to Figure 12-10. The firm's short-run supply curve is its
A) marginal cost curve. B) marginal cost curve from d and above. C) marginal cost curve from b and above. D) marginal cost curve from c and above.
Solow's theory of economic growth concludes, "the possibility of steady growth would be a miraculous stroke of luck" because
A) the three "determinants," s, (Y/K) and n are caused by different unrelated behavior. B) s reflects temporal consumption preferences. C) d reflects unrelated depreciation. D) n reflects birth control decisions.
The Tea Act:
a. raised the price of tea to colonists. b. allowed for more "middlemen" to be involved in the exportation of tea from India to America. c. made tea an "enumerated good" under the Navigation Acts. d. harmed smugglers of Dutch tea.
If the marginal propensity to save (MPS) is 0.25, the simple multiplier is _____
a. 25 b. 75 c. 5 d. 3/4 e. 4