The Fact That Output Gaps Will Not Last Indefinitely, but Will

question 26

Multiple Choice

The fact that output gaps will not last indefinitely, but will be closed by rising or falling prices is the economy's:

• A)short-run equilibrium property.
• B)self-correcting property.
• C)income-expenditure multiplier.
• D)long-run equilibrium property.

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Definitions:

False Consensus

A cognitive bias where an individual overestimates the extent to which their beliefs, values, or opinions are shared by others.

Recession

A significant decline in economic activity across the economy, lasting more than a few months, typically visible in real GDP, income, employment, industrial production, and wholesale-retail sales.

Store-Wide Sale

A promotional event where discounts are offered on most or all items within a store.

Superiors

Individuals in higher positions or ranks within an organization, with authority or managerial responsibility over others.