One reason the government enacts fiscal policy instead of waiting for the economy to correct itself is the automatic adjustment:
A. will cause permanent inflation.
B. means a lower level of potential GDP.
C. can take a very long time.
D. is generally not supported by government officials.
Answer: C
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A firm whose production function displays increasing returns to scale will have a total cost curve that is
a. a straight line through the origin. b. a curve with a positive and continually decreasing slope. c. a curve with a positive and continually increasing slope. d. a curve with a negative and continually decreasing slope.
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