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
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If a good is imported into (large) country H from country F, then the imposition of a tariff in country H
A) raises the price of the good in both countries (the "Law of One Price"). B) raises the price in country H and cannot affect its price in country F. C) lowers the price of the good in both countries. D) lowers the price of the good in H and could raise it in F. E) raises the price of the good in H and lowers it in F.
Which statement about the Life Cycle Hypothesis is NOT true?
A. It describes the choices of consumers who live for a long time. B. It separates consumers' earnings into two stages. C. It assumes that people prefer instability. D. It assumes that people prefer a higher standard of living to a lower standard of living.
The single most important phenomenon in the U.S. labor market in the second half of the twentieth century was
A. the elimination of the glass ceiling. B. the drastic reduction in the labor force participation rate of males. C. the drastic increase in the labor force participation rate of females. D. the increase in the average number of hours worked each week. E. the elimination of child poverty.
Which of the following pairs is most likely to represent substitute goods?
A. Hamburgers and hamburger rolls B. Movies and popcorn C. Pork and beef D. Shoes and shoelaces