The example of an inflationary gap in 2006-2007 suggested that the economy adjusts
a. rapidly to inflationary gaps by lowering prices.
b. rapidly to inflationary gaps by raising prices.
c. slowly to inflationary gaps by lowering prices.
d. slowly to inflationary gaps by increasing inflation.
d
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A manager of a clothing firm is deciding whether to add another factory in addition to one already in production. The manager would compare a. The total revenue gained from the two factories to the total costs of running the two factories
b. The marginal revenue expected from the second factory to the total costs of running the two factories. c. The marginal revenue expected from the second factory to the marginal cost of the second factory. d. The total revenue gained from the two factories to the marginal costs of running the two factories.
The conclusion that international trade will lead to an increase in real earnings of a country's abundant resource is known as:
a. factorintensity reversal. b. the HeckscherOhlin model. c. Riparian comparative advantage. d. the StolperSamuelson theorem.
What happens to bring the AD–AS system back into equilibrium when prices are below the equilibrium level? Above the equilibrium level?
What will be an ideal response?
In deciding what to buy, the consumer will choose the good with the:
A. Highest marginal utility B. Lowest price C. Highest marginal utility-to-price ratio D. Lowest marginal utility-to-price ratio