In a market system, the what, how and for whom questions in economics are determined by
A. buyers and sellers together.
B. the central authority.
C. those who are not in the market.
D. no one.
Answer: A
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Suppose an economy has a government budget surplus of $100, net exports of -$400, and a planned investment level of $1,000 . For this economy to be in equilibrium, saving must equal:
a. $700. b. $500. c. $750. d. $250. e. $300.
Refer to Figure 7-16. Producer surplus amounts to $300 if the price of the good is
a. $300
b. $350
c. $400
d. $450
Mathematically, the value of the tax multiplier in terms of the marginal propensity to consume (MPC) is given by the formula:
A. MPC ? 1. B. (MPC ? 1) / MPC. C. 1 / MPC. D. 1 ? [1 / (1 ? MPC)].