An inflationary GDP gap is the amount by which ________ exceeds ________.
A. equilibrium GDP; full-employment GDP
B. potential GDP; actual GDP
C. equilibrium output; actual output
D. full-employment GDP; potential GDP
Answer: A
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To implement an efficient Pigouvian tax in a competitive market that has negative production externalities, the government would need to know the shape of the entire social marginal cost curve.
Answer the following statement true (T) or false (F)
The marginal product of labor is defined as:
A. the additional output produced by the last ?L units of labor hired. B. the amount of output divided by the amount of capital used to produce the output. C. the amount of output produced multiplied by the last ?L units of labor hired. D. the amount of output divided by the number of workers employed.
If the purchase and sale of a currently illegal drug (for example, marijuana) were decriminalized, economists would expect
A) an increase in demand and supply of this drug. B) an increase in demand and a decrease in supply of this drug. C) a decrease in demand and an increase in supply of this drug. D) a decrease in demand and supply of this drug.
Use the dynamic model of aggregate demand and supply to illustrate a situation where the economy is growing but experiencing inflation in the long run
What will be an ideal response?