The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Production and consumption decisions are dependent on each other
Indicate whether the statement is true or false
If a 1 percent decrease in the price of one good generates a 3 percent increase in the quantity demanded for another good, then the
a. two goods are complementary b. cross elasticity between the two goods is positive c. two goods are substitutes d. price elasticity of demand for the good whose quantity demanded increased must be inelastic e. price elasticity of demand for the good whose quantity demanded increased must be elastic
If it costs $2,000 to pick up all the litter along a 100-mile stretch of highway, then the cost of the negative externality associated with the litter is
a. $0 b. more than $0, but less than $2,000 c. $2,000 d. more than $2,000 . but finite e. infinite
In economics, the term "leisure" describes: a. the time spent searching for productive employment. b. any time spent not working for pay
c. any time spent working for extra pay. d. the time spent after permanent retirement from work.