Efficiency is the condition that exists when there is no way resources can be reallocated to increase the production of one good without decreasing the production of another
Indicate whether the statement is true or false
true
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The quantity theory of money implies that:
A) inflation is equal to the gap between the growth rate of money supply and the current real interest rates. B) inflation is equal to the gap between the growth rate of money supply and the growth rate of nominal GDP. C) inflation is equal to the gap between the growth rate of money supply and the current nominal interest rates. D) inflation is equal to the gap between the growth rate of money supply and the growth rate of real GDP.
The balance of payments ____________
a. is positive when the nation has a trade surplus b. is an itemized account of a nation's foreign economic transactions c. for some nations is positive and for others is negative but for the sum of all nations is zero d. is negative when the nation has a trade deficit e. can only be expanded when the government has foreign exchange reserves
If a market is in disequilibrium, economists would predict that the product's price would __________ to reach equilibrium when the quantity demanded is __________ than the quantity supplied
A) rise; greater B) fall; less C) fall; greater D) rise; less E) a and b