An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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The Latin term "ceteris paribus" means
A) "obviously true." B) "what is true of the whole is not necessarily true of the parts." C) "false unless proven true." D) "other things remaining the same." E) "after this, therefore because of this."
In the long run when a perfectly competitive firm experiences negative economic profits
A) the high barriers to entry prevent further competition. B) existing firms exit the industry. C) additional firms enter the industry. D) firms have no incentive to exit or enter the industry.
Suppose each of the 50 states had only one gasoline station, and all stations were the same size. The four-firm concentration ratio a consumer would experience is:
A. 0.08. B. 0.32. C. 0.16. D. 1.0.
The production possibilities curve shifts outward when
A. there is an increase in resources or technology. B. the economy is producing efficiently. C. we produce more consumption goods over productive investment in equipment. D. the law of increasing additional cost takes hold.