The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Which of the following could contribute to cost-push inflation?
a. Greater demand for exports b. Lower income taxes c. An increase in consumption demand d. Higher government spending e. Higher wage demands by trade unions
Based on the graph showing the median voter, if candidate A took a position at VM, candidate B would have the best chance to win the election by taking a position ______.
a. as far as possible from VM
b. just to the left of V2
c. just to the right of V1
d. as near as possible to VM
Which of the following will most likely cause a change in the natural rate of unemployment?
A) changes in monetary policy B) changes in fiscal policy C) changes in expected inflation D) all of the above E) none of the above
Consumers seek to
A) maximize profits. B) maximize expected consumer surplus. C) minimize expenditures. D) maximize choice.