The example of an inflationary gap in 2006–2007 suggested that the economy adjusts
A. rapidly to inflationary gaps by lowering prices.
B. rapidly to inflationary gaps by raising prices.
C. slowly to inflationary gaps by lowering prices.
D. slowly to inflationary gaps by increasing inflation.
Answer: D
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Some people believe that employees should be paid the same wages when their jobs, although different, require similar levels of education, training, experience, and responsibility. This principle is known as:
a. the equal-pay-for-equal work doctrine. b. Lorenz equivalence. c. marginal productivity theory. d. comparable worth.
According to the law of comparative advantage,
a. individuals and nations gain when they specialize in producing those goods they consume. b. individuals and nations gain when they specialize in producing goods they can produce at a high opportunity cost and can exchange for other desired goods they can produce cheaply. c. individuals and nations gain when they specialize in producing those items for which they are the low opportunity cost producers and exchange for other desired goods they can't produce as cheaply. d. all of the above are true.