If All Prices Adjusted Immediately to Balance the Quantities Supplied

question 13

Multiple Choice

If all prices adjusted immediately to balance the quantities supplied and demanded for all goods and services:

• A)output gaps would not exist.
• B)output gaps would be positive more often than they would be negative.
• C)cyclical unemployment would be positive.
• D)potential GDP would rise much more quickly.

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Definitions:

Ethnocentrism

The belief in the inherent superiority of one's own ethnic group or culture.

Cultural Contagion

The rapid spread of beliefs, values, practices, and norms from one culture to another, often through social interaction or media.

Power Distance

The extent to which less powerful members of a society accept and expect that power is distributed unequally.

Individualism

A social theory favoring freedom of action for individuals over collective or state control.