The fact that output gaps will not last indefinitely, but will be closed by rising or falling inflation is the economy's:
A. income-expenditure multiplier.
B. self-correcting property.
C. short-run equilibrium property.
D. long-run equilibrium property.
Answer: B
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Refer to the scenario above. If the rules of the gamble are changed such that in the case of heads, the individual wins $100, and in the case of tails, the individual loses $50, the expected value of the gamble changes to:
A) $0. B) $25. C) $50. D) $75.
To maintain a monopoly, a firm must have
A) an insurmountable barrier to entry. B) a perfectly inelastic demand. C) few competitors. D) marginal revenue equal to demand.
Recall the Application about running a software programming business to answer the following question(s).The time and invested funds involved in starting a software (app) development business addresses the economic concept of:
A. the marginal principle. B. opportunity cost. C. the real-nominal principle. D. the principle of diminishing returns.
In the figure above, if the interest rate is 4 percent, there is a $0.1 trillion excess
A) quantity of money and the interest rate will rise. B) quantity of money and the interest rate will fall. C) demand for money and the interest rate will fall. D) demand for money and the interest rate will rise.