A recessionary gap
a. is of little consequence in a capitalist economy
b. represents actual physical output lost
c. implies an equilibrium level of national income at less than full employment
d. is associated with rising price levels
e. will automatically close, according to Keynes
C
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Ethics is about making good decisions. Sometimes it is hard to see what economics has to do with ethics until you remember that economics is often defined as the:
A. science of choice. B. study of production techniques. C. key branch of theology. D. study of market failures.
How does expanding worldwide trade produce gains for all the nations that participate?
What will be an ideal response?
Covered interest parity refers to the situation in which:
a. interest rates are the same in both currencies. b. spot and forward rates are the same in both currencies. c. the forward rate between the two currencies is equal to the ratio of their returns times the spot rate between the two currencies. d. there is an opportunity for arbitrage whenever prices are sluggish and sticky.
In the determination of economic growth, political freedom
A) is equally as important as economic freedom. B) contributes little to job growth. C) appears to be less important than economic freedom. D) is more important than economic freedom.