The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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For which of the following is demand likely to be most price-elastic?
a. steak b. beef (including steak, ribs, hamburger, etc.) c. meat (including beef, pork, chicken, lamb, etc.) d. protein foods (including meat, cheese, beans, eggs, fish, etc.) e. none of the above (they will all have the same elasticity)
When the crowding-out effect of an increase in government purchases is included in the analysis:
a. AD shifts left, but by more than the simple multiplier analysis would imply. b. AD shifts left, but by less than the simple multiplier analysis would imply. c. AD shifts right, but by more than the simple multiplier analysis would imply. d. AD shifts right, but by less than the simple multiplier analysis would imply.
Which of the following explains the rise in income inequality in the United States from 1970 to 2011?
a. An increase in minimum wages. b. An increase in the demand for skilled labor. c. An increase in the demand for unskilled labor. d. Reduced international trade with low-wage countries.
The political philosophy that views the redistribution of income as a form of social insurance is
a. utilitarianism b. liberalism c. libertarianism d. welfarism