Which of the following can start an inflation?
A) an increase in aggregate demand
B) an increase in aggregate supply
C) a decrease in aggregate supply
D) Both answers A and C are correct.
E) Answers A, B, and C are correct.
D
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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.
Measurements of TFP indicate that the East Asian success story is based on
A) a significantly different economic model from the one followed in the West. B) unusually large amounts of innovation. C) rapid increases in the education of the work force. D) high amounts of savings and investment. E) large current account surpluses.
During the Great Depression of the 1930s, the aggregate demand curve intersected the aggregate supply curve in the:
a. horizontal portion of the aggregate supply curve. b. upward-sloping part of the aggregate supply curve. c. vertical portion of the aggregate supply curve. d. early years in the horizontal portion, but in the later years in the vertical portion. e. early years in the vertical portion, but in the later years in the horizontal portion.
The distribution of income in the United States
a. became slightly more equal during the 1980s. b. did not change significantly during the 1980s. c. has become more unequal since 1980. d. has become more equal since 1980.