An economy that is producing a gross domestic product worth $100 million but is capable of producing an output worth $150 million at full-employment equilibrium would have a(n):
a. recessionary gap of $50 million
b. expansionary gap of $100 million.
c. recessionary gap of $150 million.
d. expansionary gap of $250 million.
a
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When the aggregate demand curve shifts to the left, real GDP falls unless the aggregate supply curve is
A) horizontal. B) upward-sloping. C) vertical. D) upward-sloping or vertical.
Charitable donations to the Red Cross
A) can be explained by the rational ignorance theory. B) can be explained by the rational self-interest theory. C) cannot be explained by the rational self-interest theory. D) prove that there is no scarcity in the United States.
Which of these is an example of a controllable factor for a firm that sells pizzas
a. The price of the pizza b. The delivery rates of the pizza c. The quality of the wings sold by the street vendor across the street d. Both A & B
If there is a positive demand shock, which of the following would represent the most likely short and long-run outcomes? (Assume the economy was initially at full employment)
a. In the short run, real GDP and the price level would increase; in the long run, real GDP would return to its original level while the price level would rise even further. b. In the short run, real GDP and the price level would increase; in the long run, real GDP and the price level would return to their original level. c. In the short run, real GDP would increase and the price level would decrease; in the long run, real GDP would return to its original level while the price level would rise even further. d. In the short run, real GDP and the price level would decrease; in the long run, real GDP would return to its original level while the price level would rise even further. e. In the short run, real GDP and the price level would increase; in the long run, real GDP would increase while the price level would return to its original level.