The Keynesian portion of the short-run aggregate supply (SRAS) curve
A. is vertical.
B. slopes upward.
C. slopes downward.
D. is horizontal.
Answer: D
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
The inflation rate in Genovia has been rising constantly. What can the central bank of the country do to control inflation?
What will be an ideal response?
?
Figure 5-4
In Figure 5-4, the rightward shift in budget lines from the one containing point A to the one containing point B
A. resulted from equal price reductions in beer and wine. B. resulted from an increase in the consumer’s income. C. could have been caused by income or price changes. D. All of the responses are correct.
Refer to the accompanying figure. At point D, the opportunity cost of making milk is:
A. high because productive resources that are better-suited to making movies are being used to make milk. B. low because the economy is specializing in making milk. C. high because productive resources that are better-suited to making movies are not being used to make milk. D. high because the economy is not operating efficiently.