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.
Answer: D
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Refer to Figure 8.1. If each player cooperated with one another, each player would find themselves ________ better off than they are by playing their dominant strategies
A) $0 B) $280 C) $490 D) $560
Long-run equilibrium under monopolistic competition is similar to that under perfect competition in that
A) firms earn normal profits. B) price equals marginal revenue. C) price equals marginal cost. D) firms produce at the minimum point of their average cost curves.
The existence of labor unions could contribute to real-wage rigidity, except that in the United States
A) labor unions are outlawed. B) most workers aren't in unions. C) unions are interested in benefits, not wages. D) unions try to increase employment rather than negotiating over wages.
Wealth creating transactions are more likely to occur
a. With private property rights b. With contract enforcement c. Both a and b d. None of the above