Output in excess of potential GDP
a) implies a negative output gap
b) describes a recession
c) is impossible
d) is unsustainable
e) creates deflation
d) is unsustainable
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When discussing the CPI, the term "commodity substitution bias" refers to changes in
A) prices that lead business to change the items they buy. B) quantities that lead households to change the items they buy. C) prices that lead households to change the items they buy. D) income that lead households to change the items they buy. E) stores so that consumers switch from one store to another.
Newspaper machines and soda vending machines operate very differently. The newspaper machine is a mechanical box. You place your four quarters in the machine and you open the door and low and behold there is a stack of newspapers at your disposal
Most people take one and close the door for the next patron to purchase his own copy. But notice that soda vending machines don't operate the same way. They are also mechanical but when the four quarters are inserted and a selection is made only one can of soda is available for the consumer to purchase. Explain in terms of marginal utility why these two machines are designed so differently?
In the long run in perfect competition, no firm can earn a normal profit
a. True b. False
Which economy tends to use loyalty as a motivating factor?
a. China b. India c. USSR d. Japan e. all of the above