The economy's self-correcting mechanism
a. tends to push unemployment toward a specific point called the natural rate of unemployment.
b. works better at correcting inflationary gaps than recessionary gaps.
c. cannot work if the Phillips curve is vertical.
d. ensures that the economy will not have to endure a long period of high unemployment.
a
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Refer to the above figure. If real disposable income is less than $5,000, then saving is
A) negative. B) 0. C) positive. D) none of the above: cannot be determined with the given information.
Which of following is not a condition that must be met for a cartel to maximize its joint profits?
A) Total output by the cartel must be allocated among the member firms such that the individual firm's marginal costs are equal. B) The cartel must produce the level of output at which its marginal revenues and marginal costs are equal. C) The cartel must be operating in the inelastic portion of its demand curve. D) Each member firm must employ the least-cost method of production.