At a short-run equilibrium ________, while at a long-run equilibrium ________.
A. there is an output gap; output equals potential output
B. the inflation rate is stable; there is an output gap
C. output equals potential output; the inflation rate is stable
D. output is at a level consistent with inflation; there is an output gap
Answer: A
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Financial markets
A) channel funds indirectly between borrowers and lenders. B) channel funds directly from lenders to borrowers. C) act as go-betweens by holding a portfolio of assets and issuing claims based on that portfolio to savers. D) generally provide lenders with lower returns than do financial intermediaries.
In a country with unusually high tax rates, one might expect that ________
A) GDP might be overstated because the government might avoid running surpluses B) GDP might be understated because its citizens might avoid reporting some of their income C) GDP might be overstated because the government might raise its outlays D) GDP might be understated because its citizens might flee the country E) after tax income should be much higher than that of countries with lower tax rates
Which of the following statements is true?
a. Total utility is the extra satisfaction from the consumption of a good or service. b. Marginal utility is the amount of satisfaction received from all the units of a good or service consumed. c. The law of diminishing marginal utility states that as more of a good or service is consumed total utility decreases. d. Consumer equilibrium is a combination of goods and services consumed which maximizes total utility from a given budget.
Cost-of-service regulation allows regulated companies to charge prices that
A. reflect the cost of regulating the industry, plus the marginal cost of the product. B. reflect the actual average cost of providing the services to the customer. C. are determined by competition in other geographic markets. D. allow monopoly profits to the producer.