The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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Refer to Table 12.1. Assuming the inflation rate forecast to be accurate, which nation would pay the highest nominal rate of return?
A) Brazil B) South Africa C) Australia D) the United States
To reach general equilibrium, the price level adjusts to shift the ________ until it intersects with the ________
A) IS curve; FE line and LM curve B) FE line; LM and IS curves C) LM curve; FE line and IS curve D) ND curve; FE line and NS curve
Production involving a positive externality is inefficient
a. True b. False
The Phillips Curve will shift when
A. the expected inflation rate changes. B. the overall employment rate remains unchanged. C. the price level falls. D. none of these.