Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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The authority of the government to take private property for public use, given just compensation to the owner, is known as
A) search and seizure. B) eminent domain. C) authoritarian capitalism. D) internalizing an externality.
The risk premium of corporate bonds typically increases
A) when the average price of corporate bonds increase. B) during a recession. C) when the interest rates on corporate bonds decreases. D) when the risk premium on treasury bonds increases.
If we say that two variables are inversely related, this means that:
A. the two graph as an upsloping line. B. an increase in one variable is associated with a decrease in the other. C. an increase in one variable is associated with an increase in the other. D. the resulting relationship can be portrayed by a straight line parallel to the horizontal axis.
Economists will always reach the same conclusion in their positive analyses.
Answer the following statement true (T) or false (F)