Suppose the AD curve and the SRAS curve intersect to the left of the LRAS curve. Which of the following is true?
A) The economy is in a recessionary gap.
B) The economy is in an inflationary gap.
C) The economy is in a long-run equilibrium.
D) This situation is actually impossible.
A
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Other things equal:
A. Workers with higher levels of human capital will tend to migrate to countries providing greater wage opportunities B. Workers with lower levels of human capital will tend to migrate to countries providing greater wage opportunities C. Smaller wage differences between countries will tend to increase the flow of immigration between countries D. Workers with higher levels of human capital will migrate to higher-wage countries regardless of the distance between countries
If the Fed sterilizes the purchase of foreign assets,
A) the monetary base is left unchanged. B) the monetary base rises by the amount of the purchase. C) the monetary base falls by the amount of the purchase. D) the monetary base may rise, fall, or remain unchanged depending on the reaction of domestic interest rates to the purchase.
If both imports and exports fell, a. AD would decrease
b. AD would increase. c. AD would decrease if exports fell more than imports. d. AD would increase if exports fell more than imports.
Which of the following would be considered rent-seeking activity?
a. A software firm using lawsuits to drive competitors out of business. b. A technology firm investing in extremely expensive capital equipment. c. A large firm trying to charge lower prices than its competitors. d. An auto manufacturer using features and styling to differentiate its models from its competitors'.