__________ identifies the level of Real GDP the economy produces when all economywide adjustments have taken place and there are no misperceptions on the part of workers
A) Short-run equilibrium
B) Disequilibrium
C) Long-run equilibrium
D) Equilibrium
E) none of the above
C
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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
Explain the total revenue test
What will be an ideal response?
A way governments have of financing their deficits without having to pay interest is to
A) issue currency. B) sell bonds to financial intermediaries. C) borrow directly from financial intermediaries. D) sell bonds in the direct finance market.
The most important way in which inefficiency occurs is
a. producing more military goods instead of civilian goods. b. limiting economic growth by limiting capital spending. c. unemployment of labor and other resources. d. producing outside the production possibilities frontier. e. All of the above are correct.