If the economy experiences an unplanned inventory accumulation at the full employment level of GDP, then the economy is in a(n)
a. inflationary gap.
b. hyperinflation.
c. recessionary gap.
d. full employment gap.
c
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
Refer to the scenario above. Which of the following strategy combinations denote a Nash equilibrium?
A) (Left, Left) B) (Left, Right) C) (Right, Left ) D) (Right, Right)
It is often argued that gas stations operate inefficiently because they have "excess capacity" in the form of more pumping stations than they would otherwise need if they were operating under conditions of perfect competition
However, can you think of any reason why a gas station franchise owner would wish to install more pumps than he knows will rarely if ever be fully utilized at any one time? Can you explain the economic logic of this "apparent" wastefulness?
The short-run Phillips Curve is _________, and the long-run Phillips Curve is ________.
A. downward sloping; vertical B. downward sloping; horizontal C. upward sloping; vertical D. upward sloping; horizontal