The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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If consumption is defined as C = 4,500 + 0.75Y, then the marginal propensity to save is 0.25
Indicate whether the statement is true or false
As a bank's assets become less risky, its
A) risk-based capital ratio rises. B) risk-based capital ratio falls. C) leverage ratio rises. D) leverage ratio falls.
Ways to "game" the budgeting process include
a. delaying sales if just short of a target b. accelerating expenses if just short of a target c. accelerating sales once a target is met d. accelerating expenses costs once a target is met
Natural oligopolies occur when
a. the government establishes a market with a few large producers b. the market output could be produced at a higher cost by several large firms rather than many small firms c. there are no barriers to entry d. the total market output could be produced at a lower cost by several large firms rather than many small firms e. one large firm can produce the total market output at a lower cost than several smaller firms could