The process of an economy adjusting from a recession back to potential GDP in the long run without any government intervention is known as
A) monetary policy.
B) an automatic mechanism.
C) "releasing sticky prices."
D) fiscal policy.
Answer: B
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If government expenditures on goods and services increases by $20 billion, then aggregate demand
A) increases by $20 billion. B) increases by more than $20 billion. C) decreases by $20 billion. D) increases by less than $20 billion. E) decreases by more than $20 billion.
The members of Federal Reserve district bank boards of directors who are leaders in industry, commerce, and agriculture are known as
A) Class A directors. B) Class B directors. C) Class C directors. D) Class D directors.
Which of the following statements best describes trade-offs?
a. With a trade-off, it is necessary to give up some of one good to gain more of the other good. b. Trade-offs are not determined by the relative prices of the goods. c. A trade-off is always represented by a straight vertical line. d. A trade-off is always represented by a straight horizontal line.
Product differentiation:
A. refers to the attempt of firms to make their products look like those of the other firms in the industry and is used in a perfectly competitive market structure. B. refers to the attempt of firms to make real or apparent differences in essentially substitutable products look different in the minds of the consumers and is used in a monopolistically competitive market structure. C. leads to nonprice competition in a perfectly competitive market structure. D. leads to price equaling the minimum average total cost in the long run in a monopolistically competitive market structure.