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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An increase in technology ________ potential GDP and ________ aggregate supply
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases E) does not change; does not change
A monopolist sells to two consumer groups, students and non-students
Demand for students: Q = 500 - 1/2P Demand for non-students: Q = 750 - 2P MC = 20 Find the profit-maximizing price/quantity combination in each market if the groups can be separated.
Which of the following conditions correctly describes a Nash equilibrium when two firms are in the market?
A. ?1(s1*, s2*) ? ?1(s1, s2*) for all s1. B. ?1(s1, s2*) ? ?2(s1*, s2*) for all s1 and ?2(s1*, s2) ? ?1(s1*, s2*) for all s2. C. ?1(s1*, s2*) ? ?1(s1, s2*) for all s1 and ?2(s1*, s2*) ? ?2(s1*, s2) for all s2. D. ?1(s1*, s2*) ? ?2(s1, s2*) for all s1 and ?2(s1*, s2*) ? ?1(s1*, s2) for all s2.
In a closed economy, which of the following equations reflects investment? (Y = GDP, C = Consumption, G = Government purchases, T = Taxes, and TR = Transfers)
A) Y - C - G B) Y - C - T C) Y - T + TR D) C + G -T