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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Given two economic systems, A and B, if economy A has a comparative advantage in the production of widgets, then
A) the inputs necessary to produce widgets in economy A cost less than in economy B. B) economy A must give up less of all other goods to produce widgets than economy B. C) economy A is less efficient in the production of some goods than economy B. D) economy A would not benefit from the specialization of production.
Pollution taxes are preferred to direct controls because they don't require a way of measuring pollutants produced
a. True b. False Indicate whether the statement is true or false
Businesses will want to borrow more funds as the real rate of interest decreases
a. True b. False Indicate whether the statement is true or false
A price ceiling below the market clearing price results in I. excess quantity demand II. excess quantity supplied III. entry of new producers
A) I only B) II only C) III only D) Both I and III