The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment.
B. exogenous spending.
C. recessionary gaps.
D. expansionary gaps.
Answer: D
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A positive externality
a. causes the product to be overproduced. b. provides an additional benefit to market participants. c. benefits consumers because it results in a lower equilibrium price. d. is a benefit to a market bystander.
Based on the graph showing rational expectations and the AD/AS model, when expansionary policy creates the movement to a point higher up the long-run aggregate supply curve, the result is ______.
a. higher price levels and lower RGDP
b. lower price levels and higher RGDP
c. higher price levels and no change in RGDP
d. higher RGDP and no change in price levels
Compared to 1968, in 2008 income distribution would be considered
A. much more equal. B. somewhat more equal. C. about as equal. D. Much less equal.
What is included in MB that is not included in either M1 or M2?
A. currency B. reserve deposits C. savings accounts D. checking accounts