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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Financial deepening is synonymous with ________
A) issuing equities B) financial development C) borrowing additional funds from world capital markets D) holding a well diversified portfolio
If GDP growth were to increase, it would cause the labor:
A. demand curve to shift left. B. demand curve to shift right. C. supply curve to shift left. D. supply curve to shift right.
Opportunity cost:
a. has no relationship to the various alternatives that must be given up when a choice is made in the context of scarcity. b. represents the worst alternative sacrificed for a chosen alternative. c. represents all alternatives not chosen. d. represents the best alternative sacrificed for a chosen alternative.
Two identical firms compete as a Cournot duopoly. The demand they face is P = 100 ? 2Q. The cost function for each firm is C(Q) = 4Q. In equilibrium, the deadweight loss is:
A. $512. B. $384. C. $256. D. $128.