To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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Universities tend to set tuition high and then, through financial aid, effectively charge each student a different price for education. Financial aid statements allow the university to determine the student's financial status and set an appropriate price to charge the student. This situation is an example of
a. first-degree price discrimination. b. second-degree price discrimination. c. third-degree price discrimination. d. a two-part tariff.
Short-run equilibrium output is where the level of output:
A. equals aggregate expenditure. B. equals real GDP per capita. C. equals potential output. D. maximizes firm profits.
Which of the following is true?
A) To be classified as employed, you must work at least 20 hours per week at a paid job. B) If you are not working and turn down a job offer in the previous week, you are no longer classified as unemployed. C) To be classified as employed, you must be a full-time worker at a paid job. D) Part-time workers are all those who work less than 40 hours per week. E) To be classified as employed, you must work at least 1 hour per week at a paid job or 15 hours or more as an unpaid worker in your family business.
The supply-side effects show that a tax cut on labor income ________ employment and ________ potential GDP
A) increases; increases B) increases; does not change C) increases; decreases D) decreases; increases E) decreases; decreases