If a country does not engage in trade with other countries, it is known as
A. A trade surplus economy.
B. A trade deficit economy.
C. An open economy.
D. A closed economy.
Answer: D
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
GDP does not account for things we do not value or like, and these things are called "economic bads."
Indicate whether the statement is true or false
As student reasons that "If I didn't go to class tonight, I would spend three hours at work where I earn $10 per hour. In addition, my annual parking permit costs the equivalent of $2 per day.". The opportunity cost to that student of attending that class this evening is: a. $0
b. $2. c. $30. d. $32.
Banks' views of the economy change from confidence to caution when they expect
a. wage rates to fall b. employment to increase c. consumer spending to fall d. a recession to occur e. economic expansion