If the economy automatically tends toward full employment, then government stabilization policy
a. must be constantly in force.
b. will be necessary only in recessions.
c. will be necessary only in inflationary periods.
d. will not be necessary.
d
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When the unemployment rate is greater than the natural unemployment rate, real GDP is
A) greater than full employment GDP. B) less than potential GDP. C) equal to potential GDP. D) greater than potential GDP. E) unrelated to potential GDP.
The apple market is perfectly competitive and is in long-run equilibrium. Now a disease kills 50 percent of the apple orchards. In the short run, the price of a bag of apples ________ and the remaining apple growers make ________ economic profit
In the long run, the ________. A) increases; zero; price of apples will return to their original level B) remains the same; zero; orchards will be replanted and growers will make normal profits C) increases; zero; orchards will be replanted and economic profit will return to zero D) increases; positive; orchards will be replanted and economic profit will return to zero