What is the difference between a recessionary gap and an inflationary gap?
What will be an ideal response?
A recessionary gap exists when the economy is in a below-full-employment equilibrium when potential GDP exceeds real GDP. The recessionary gap is the amount by which potential GDP exceeds real GDP. An inflationary gap occurs when the economy is in an above-full-employment equilibrium when real GDP exceeds potential GDP. In this case, the inflationary gap is the difference between real GDP and potential GDP.
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The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
In the consumer choice problem, consumers are confronted with which of the following? a. A set of different consumer goods and services to choose from
b. A set of prices for those goods and services. c. A finite budget that constrains the quantity of goods and services that consumers can buy. d. Preferences or utility associated with consuming different quantities of each of the different goods and services. e. All of the above answers are correct.
Approximately how many commercial banks are now operating in the United States?
A. About 7,300. B. About 6,000. C. About 8,500. D. About 6,800.
In NASCAR, the IRL, and Formula 1 racing, the common key feature of the ownership structure is that they are all governed by
A. cooperative arrangements of drivers and team owners. B. family-owned monopolies. C. corporate governance structures that require that all decisions be made by a Board of Directors. D. perfect competition.