The self-correcting mechanism would be expected to be very rapid in an economy with

A. a large multiplier.
B. flexible prices.
C. rigid wages.
D. high labor productivity.


Answer: B

Economics

You might also like to view...

In a ________ banking system, commercial banks engage in securities underwriting, but legal subsidiaries conduct the different activities. Also, banking and insurance are not typically undertaken together in this system

A) universal B) British-style universal C) short-fence D) compartmentalized

Economics

What is TRUE about every point along a utilities possibilities frontier?

A) Markets are perfectly competitive. B) It is possible to move to from one point on the frontier to another point and make everyone better off. C) All allocations are efficient. D) It includes some unattainable points.

Economics

Voluntary programs, direct controls, and emissions taxes are all equally effective ways of controlling pollution

a. True b. False Indicate whether the statement is true or false

Economics

If the Fed wished to decrease interest rates, it could:

A. increase the reserve requirement or conduct an open market sale. B. increase the reserve requirement or conduct an open market purchase. C. decrease the reserve requirement or conduct an open market sale. D. decrease the reserve requirement or conduct an open market purchase.

Economics