In Figure 10.1, suppose this economy is in equilibrium at point a and QF represents full employment output. Which of the following statements is true?
A. Inventories are falling.
B. The economy is experiencing serious inflation problems.
C. Inventories are accumulating.
D. There is no GDP gap.
Answer: D
You might also like to view...
According to Say's law
A) supply creates its own demand. B) demand creates supply. C) changes in supply create supply-side inflation. D) changes in demand create demand-side inflation.
Cost-push inflation is due to:
a. raw material cost increases. b. energy cost increases. c. All of the answers are correct. d. labor cost increases.
In the above figure, at the profit-maximizing rate of production for the perfectly competitive firm, total revenue is
A. $130. B. $70. C. $100. D. $30.
A representative unit that measures the want-satisfying power of a good is
A. purchasing power. B. a margin. C. income. D. a util.