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
You might also like to view...
For an individual consumer, a corner solution may be optimal such that MRS and MRT are not equal,
A) but this is not possible in an Edgeworth Box due to the transitivity of preferences. B) but this is not possible in an Edgeworth Box because price ratios must be positive. C) and this may also occur in an Edgeworth Box. D) and this may only occur in an Edgeworth Box under the perfect complements case.
Stock prices fell throughout much of 2007 and 2008 and many investors decided to switch their funds into the bond market. What only about 30 percent of surveyed investors knew was that as bond prices rise, interest rates
a. fall in reaction to the increased demand for bonds. b. fall in reaction to the decreased demand for bonds. c. rise in reaction to the increased demand for bonds. d. rise in reaction to the decreased demand for bonds.
In 2009, the top 1 percent of income earners made about
a. 1 percent of all income and paid about 1 percent of all taxes. b. 13 percent of all income and paid about 22 percent of all taxes. c. 22 percent of all income and paid about 13 percent of all taxes. d. 50 percent of all income and paid about 50 percent of all taxes.
A bank is a financial intermediary. Which of the following statements is most accurate?
A. The bank's depositors are the ultimate lenders and the bank is the ultimate borrower. B. The bank's depositors are the ultimate lenders, while those seeking loans from the bank are the ultimate spenders. C. Those seeking loans from the bank are the ultimate spenders; the bank's stockholders are the ultimate lenders. D. People seeking loans from the bank are the ultimate spenders while the bank is the ultimate lender.