According to Say's law
A. demand creates supply.
B. changes in demand create demand-side inflation.
C. changes in supply create supply-side inflation.
D. supply creates its own demand.
Answer: D
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Suppose a lottery ticket costs $1and has a jackpot of $1,000 . What must the probability of winning nothing be if the bet is fair?
a. 99% b. 99.9% c. 99.999% d. 99.9999%
Which of the following statements regarding comparisons of productivity across two firms is true?
A. The firm with the higher APL is the more productive firm. B. The firm with the higher MPL is the more productive firm. C. The firm with the lower MPL is the more productive firm. D. The average product of labor can vary with the choice of inputs and the level of outputs, so the firm with the higher APL may not be the most productive.
Keynes believed
A. lowering wages could cure a depression. B. the interest rate was more important than the expected rate of profit in determining the level of investment in an economy. C. our economy always tends toward full employment. D. aggregate demand was more important than aggregate supply in the short run.