If there is currently an inflationary gap:
a. The price level will tend to rise.
b. Real output will tend to fall
c. Both a. and b. will occur.
d. None of the above will occur.
c
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Which of the following CORRECTLY describes how price adjustments eliminate a shortage?
A) As the price rises, the quantity demanded decreases while the quantity supplied increases. B) As the price rises, the quantity demanded increases while the quantity supplied decreases. C) As the price falls, the quantity demanded decreases while the quantity supplied increases. D) As the price falls, the quantity demanded increases while the quantity supplied decreases.
A firm with two factories, one in Michigan and one in Texas, has decided that it should produce a total of 500 units of output in order to maximize profit. The firm is currently producing 200 units in the Michigan factory and 300 units in the Texas factory. At this allocation between plants, the last unit of output produced in Michigan added $5 to total cost, while the last unit of output produced in Texas added $3 to total cost. If the firm produces 201 units in Michigan and 299 units in Texas instead:
A. total cost will decrease $2 B. total cost will decrease $3 C. profit will increase $2 D. both a and b E. none of the above
All the countries of the EU participate in the Schengen Agreement
Indicate whether the statement is true or false
All of the following push a country inside its production possibilities curve except
A. A sudden burst of inflation that has not been anticipated. B. The withholding of resources from the production process because of speculation. C. A sudden burst of deflation that has not been anticipated. D. An increase in labor force participation.