If the government does not react to a recession:
A. the economy will remain out of its long-run equilibrium indefinitely.
B. voters and consumers are likely to be happy with less government interference.
C. the economy will recover, but much more slowly.
D. the government generally doesn't engage in any policy during a recession.
Answer: C
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The opportunity cost of an action is
A) everything that makes an action possible. B) the monetary payments that make an action possible. C) the sum of the human efforts that contribute to an action. D) the value of the next-best alternative that must be sacrificed to take the action.
In economics, the concept that individuals are motivated by self-interest and respond predictably to opportunities for gain is known as
A) rational self-interest. B) altruism. C) sufficiency. D) empiricism.
Economic surplus is another term for which of the following?
a. efficiency b. consumer surplus c. social surplus d. deadweight loss
An increase in the inflation rate of one country relative to another country will probably cause
A) an increase in exports for the inflating country. B) a balance of trade deficit for the inflating country. C) a current account surplus for the inflating country. D) an increase in the amount of official reserves held by the inflating country's central bank.