To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:

A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.


Answer: C

Economics

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Answer the following statement true (T) or false (F)

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A decrease in the interest rates in a country:

A) increases net exports. B) does not affect net exports. C) reduces net exports. D) results in an inflow of capital to the country.

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In the past the federal government often employed what is called a "command-and-control" approach to the reduction of pollution emissions. Many economists are critical of this approach because

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If the marginal product of labor is always positive, the total revenue will grow with each additional worker. Firms do not continuously hire new workers because:

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Economics