The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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A discouraged worker is one who:
a. is underqualified for the current job. b. dislikes the current job but is afraid to quit. c. drops out of the civilian labor force because he/she cannot find a job. d. quits his/her job because the possibility of advancement was very low. e. is overqualified for the current job.
Assume that any given percentage of the population earns an equal percentage of real GDP. This percentage of population will be represented by:
a. a point below the line of income equality. b. a line lying below the line of income equality. c. a point on the line of income equality. d. a line lying above the line of income equality. e. a point above the line of income equality.