The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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For a natural monopoly, if price is set equal to marginal cost then the firm incurs an economic loss
Indicate whether the statement is true or false
Internal balance describes
A) equilibrium in the goods market. B) a desired level of trade or capital flows. C) where the IS and BP curve intersect. D) a domestic rate of growth consistent with a low unemployment rate.
In what way is government debt like individual debt?
A. Inflation reduces the real value of both types of debt. B. Government never has to pay back its debt. C. Government can pay its debt by printing money. D. Much of government debt is owed to its own citizens.
The case for deregulation rests on the argument that
A. Economies of scale are better achieved with the invisible hand. B. Government imperfections are worse than the market imperfections they were designed to cure. C. Regulation is desirable and efficient, but a laissez-faire approach is more equitable. D. Public goods are best provided by laissez faire.