The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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Suppose the President asks you to write him a letter suggesting ways the government might help the economy achieve permanently higher rates of economic growth
Based on your understanding of growth theory and growth accounting, what would you suggest?
Producer surplus in a perfectly competitive industry is
A) the difference between profit at the profit-maximizing output and profit at the profit-minimizing output. B) the difference between revenue and total cost. C) the difference between revenue and variable cost. D) the difference between revenue and fixed cost. E) the same thing as revenue.
According to the graph shown, if this economy were to open to trade, surplus would:
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. increase overall.
B. decrease for the producer.
C. transfer from producer to consumer.
D. increase for the consumer.
If perfectly competitive industry B is currently realizing economic profits, we would expect that:
a. industry output will fall, good B will fall in price, and economic profits will tend to disappear. b. industry output will fall, good B will rise in price, and economic profits will tend to disappear. c. industry output will rise, good B will fall in price, and economic profits will tend to disappear. d. industry output will rise, good B will fall in price, and economic profits will tend to increase.