The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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In the figure above, an increase in the monetary base would create a change such as a
A) movement from point a to point b along the supply of money curve MS0. B) movement from point b to point a along the supply of money curve MS0. C) shift from the supply of money curve MS0 to the supply of money curve MS1. D) shift from the supply of money curve MS1 to the supply of money curve MS0.
In an open economy, an increase in foreign output would cause the IS curve to shift ________ and a decrease in the foreign real interest rate would cause the IS curve to shift ________
A) down; down B) down; up C) up; down D) up; up
Long-term solutions to communitywide poverty must involve:
A. ways to expand the range opportunities available to the population. B. increasing the value of the currency. C. ways to reduce taxes collected by local governments. D. All of these are true.
Suppose, in the United States, each farmer is given a federal agricultural subsidy worth $30,000 . What will be the effect of such subsidy?
a. It discourages domestic agricultural production. b. It allows U.S. farmers to sell their products for lower prices in foreign markets. c. It gives foreign producers an unfair cost advantage. d. It increases the amount of agricultural imports into the United States. e. It reduces the prices of the primary products in the U.S. market.