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
You might also like to view...
Hyperinflation:
a. Has no official definition. b. Usually ends with the nation abandoning its old currency and establishing a new one. c. Is good for most nations because it increaes their nominal GDPs. d. Is really a relic of the past with no current-day counterparts.
Suppose that total sales in an industry in a particular year are $600 million and sales by the top four sellers are $200 million, $150 million, $100 million, and $50 million, respectively. We can conclude that:
A. price leadership exists in this industry. B. the concentration ratio is more than 80 percent. C. this industry is a differentiated oligopoly. D. the firms in this industry face a kinked demand curve.