The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending.
B. recessionary gaps.
C. expansionary gaps.
D. unemployment.
Answer: B
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Regarding the number of discouraged workers,
a. the Bureau of Labor Statistics follows rather loose criteria to classify them. b. they are included in the official unemployment measure. c. there is universal agreement among economists that they should be counted as unemployed d. they are also known as involuntary part time workers. e. no one knows for sure how many are there.
When a tax is placed on the buyers of cell phones, the size of the cell phone market
a. and the effective price received by sellers both decrease. b. decreases, but the effective price received by sellers increases. c. increases, but the effective price received by sellers decreases. d. and the effective price received by sellers both increase.
A positive externality arises when a person engages in an activity that has
a. an adverse effect on a bystander who is not compensated by the person who causes the effect. b. an adverse effect on a bystander who is compensated by the person who causes the effect. c. a beneficial effect on a bystander who pays the person who causes the effect. d. a beneficial effect on a bystander who does not pay the person who causes the effect.
In the demand equation log(Q) = a - b log(P) + b2 log(P2) + c log(I), where P is the price of the good in question, P2 is the price of a second good and I
is income, the second good must be: A. a complement for the good in question. B. a normal good. C. an inferior good. D. a substitute for the good in question.