At the end of 2014, the economy was ________ and the deficit was ________.
A. well below full employment; entirely cyclical
B. at full employment; entirely structural
C. not quite at full employment; partially cyclical
D. above full employment; entirely structural
Answer: C
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Refer to Figure 7-2. At the market equilibrium, the deadweight loss is equal to
A) $0. B) $500,000. C) $1,000,000. D) $2,000,000.
In the equation of exchange, the concept that provides the link between M and PY is called
A) the velocity of money. B) aggregate demand. C) aggregate supply. D) the money multiplier.
The main reason for the rising market value of corporate stock is
A) falling interest rates. B) changes in tax laws. C) increases in the prices of existing stock. D) the increased supply of new stock.
Refer to the above figure. Suppose E is the original equilibrium. An increase in the demand for dollars will be reflected in this figure by
A) an increase in the demand for yen as both imports and exports increase. B) a decrease in the demand for yen as the U.S. balance of payments improves. C) an increase in the supply of yen as Japan tries to buy more U.S. goods. D) a decrease in the supply of yen as Japan is able to pay less for U.S. goods.