Which of the following is true when there is a recessionary gap?
a. Real output exceeds the natural level of real output
b. Unemployment exceeds the natural rate of unemployment.
c. Employment exceeds full employment.
d. All of the above are true when there is a recessionary gap.
c. Employment exceeds full employment.
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Suppose you are planning to open a lemonade stand. List separately all the explicit and implicit costs that might be involved
The maximum price that a buyer will pay for a good is called
a. consumer surplus. b. willingness to pay. c. equilibrium. d. efficiency.
Which of the following market transactions are excluded from the computation of U.S. GDP?
a. Purchases of products such as wine, beer, and hard liquor by a household b. New purchases that a resident of one state makes in a different state c. Money spent on pollution cleanup and other restorative projects d. Purchase of raw materials by a firm for further reprocessing
The circular flow model:
a. Illustrates the interdependence of businesses and consumers b. Assumes that central planning is taking place c. Illustrates how natural resources are created d. Illustrates how money is created by the banking system