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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Compared to a single-price monopoly, a perfectly competitive market with the same costs produces ________ output and has a ________ price
A) less; lower B) less; higher C) more; lower D) more; higher
The pig farm industry is perfectly competitive. Which of the following is true?
a. Since the industry is perfectly competitive, price and quantity are at the socially efficient levels. b. The competitive price is higher and quantity lower than the socially efficient point. c. The competitive price is higher and quantity higher than the socially efficient point. d. The competitive price is lower and quantity higher than the socially efficient point.