Most economists think that the economy’s self-correcting mechanism is
A. relatively rapid.
B. rapid in the short run and sluggish in the long run.
C. sluggish in the short run and rapid in the long run.
D. relatively sluggish.
Answer: D
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As an economic expansion approaches its peak, it is very likely that real GDP will
A) exceed nominal GDP. B) exceed potential GDP. C) equal nominal GDP but not potential GDP. D) be less than potential GDP. E) equal nominal GDP and equal potential GDP.
The mercantilist economic doctrine was widely followed from the sixteenth to the eighteenth century in Europe
Mercantilists advocated the use of tariffs to restrict trade as they believed that countries that export more than they import will increase wealth. What could be the problem with such an economic policy?
The Lorenz curve shows
a. that income is unevenly distributed. b. that income is normally distributed. c. how income is distributed. d. that income is distributed according to talent and abilities.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.