The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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When a policy creates the most social gain possible, it is considered "best" by the
a. efficiency criterion. b. Pareto criterion. c. Edgeworth criterion. d. maximin criterion.
If the Fed chose to change its policy actions implemented during the heart of the recession faster than the timing suggested by the White House, this would be an indication of the Fed's
A) independence. B) frictional relationship with the White House. C) changing its monetary policy target. D) lack of credibility.
Under an oligopoly market structure, rival firms take completely independent decisions
a. True b. False Indicate whether the statement is true or false
Kimberly quit her job as a computer programmer, spent two weeks in Hawaii, and is now looking for (and expects to soon find) another job. She is _____ unemployed.
A. psychologically B. structurally C. frictionally D. cyclically