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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You produce stereo components for sale in two markets, foreign and domestic, and the two groups of consumers cannot trade with one another. You will charge the higher price in the market with the
A) lower own price elasticity of demand (more inelastic demand). B) higher own price elasticity of demand (more elastic demand). C) larger teenage population. D) greater consumer incomes.
In a given year, U.S. nominal GDP was $5,744 billion and the GDP chain price index is 93.6. Real GDP is:
A. $6,137 billion. B. $5,376 billion. C. $6,000 billion. D. $6,376 billion.
According to the quantity theory of money, if an economy produces 5,000 units of output, its money supply equals $40,000 and the velocity of money equals one, then the price level will equal:
A. $0.13. B. $1.25. C. $8. D. $200.
One way that perfect competition and monopoly differ is that in
A. perfect competition, there is only one firm in the industry. B. perfect competition, there is a difference between firm and industry demand. C. monopoly, the firm produces less than the total market quantity supplied. D. monopoly, there is a difference between firm and industry demand.