Inventories help manufacturers cope with unexpected changes in the supply of their resources or in the demand for their products

If the United States can make auto parts in less time than Mexico, then why are U.S. auto parts made in Mexico?

a. Trade is based on comparative advantage, not absolute advantage. b. Mexico has a larger labor force and more manufacturing sites. c. North American manufacturing is evenly divided based on treaties. d. Mexican suppliers have an absolute advantage over U.S. companies.

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.