The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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Which of the following weights on utility (over four periods starting with the current one) provide an illustration of hyperbolic discounting that could well lead to inconsistent choices over time?
a. 1, .5, .25, .125. b. 1, .25, .0625, .015625. c. 1, .8, .72, .648. d. 1, 1, 1, 1.
In a perfectly competitive market that is operating at maximum efficiency, the Dansby-Willig index would be:
A. 1.00. B. 0.50. C. zero. D. 0.25.
Jason, a high-school student, mows lawns for families in his neighborhood. The going rate is $12 for each lawn-mowing service. Jason would like to charge $20 because he believes he has more experience mowing lawns than the many other teenagers who also
offer the same service. If the market for lawn mowing services is perfectly competitive, what would happen if Jason raised his price? A) He would lose some but not all his customers. B) Initially, his customers might complain but over time they will come to accept the new rate. C) If Jason raises his price, he would lose all his customers. D) If Jason raises his price, then all others supplying the same service will also raise their prices.
Refer to the table. The level of productivity in the economy is:
Answer the question on the basis of the following information about the relationship between input quantities and real domestic output in a hypothetical economy:
A. 2.
B. .5.
C. 4.
D. 200.