If a Market Economy Has a Self-Correcting Mechanism, When Output

question 165

Multiple Choice

If a market economy has a self-correcting mechanism, when output is lower than potential or full-employment output,

• A) changes will occur that will automatically guide the economy back to full employment.
• B) resource prices will increase.
• C) prolonged unemployment such as was experienced during the Great Depression will occur.
• D) the economy will fall into a more severe recession.

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Definitions:

Tangible Attributes

The physical characteristics of a product that can be sensed, such as its size, shape, weight, and texture.

Intangible Attributes

Characteristics of a product or service that cannot be physically touched or measured, such as brand reputation or customer service quality.

Organizational Buyers

Those who make purchasing decisions on behalf of a company or organization, often including considerations like bulk buying, contractual negotiations, and supplier relationships.

Nondurable Good

Products that are consumed or are only usable for a short period before they are depleted or become unusable.