In Figure 9.9, at a full-employment output level of $150 billion, the gap by which actual aggregate income or GDP is different from full-employment income or GDP is
A. An inflationary gap of $25 billion income.
B. An inflationary gap of $50 billion income.
C. A recessionary gap of $50 billion income.
D. Expenditure equilibrium.
Answer: C
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Use the following diagram to answer the next question.
Consider the data points shown in the diagram, the observations range from the oldest on the right to the most recent observations on the left. Based on these observations we can say ________.
A. the evidence shows a positive relationship between unemployment and inflation B. the evidence shows a negative relationship between unemployment and inflation C. the evidence shows there is no relationship between unemployment and inflation D. there is not enough evidence to determine the relationship between unemployment and inflation
Refer to Figure 14-5. Does it make sense for Netflix to lower its price in order to deter Spotify's entry into the streaming video market?
A) yes, because it is always profitable to remain a monopoly B) yes, because Netflix stands to make a profit of $7 million by lowering its price and keeping Spotify out of the market C) no, because Spotify will enter the market regardless of Netflix's decision about its subscription price D) no, because Netflix will make a higher profit by keeping its subscription price unchanged, whether Spotify enters the market or not
Which of the following areas of study typifies macroeconomics as opposed to microeconomics?
a. the effects of rent control on the availability of housing in New York City b. the economic impact of tornadoes on cities and towns in Oklahoma c. how tariffs on shoes affects the shoe industry d. the effect on the economy of changes in the nation's unemployment rate
Which of the following is most important for young people wanting to increase their wealth and improve their living standard over time?
A) spending all of their current income on consumer goods and services B) extensive use of credit cards to purchase needed items C) purchasing a new car at least every two years D) regularly saving and investing a portion of their income