In the short run, when a firm is about to begin production it pays only:
A) variable costs.
B) opportunity costs.
C) sunk costs.
D) fixed costs.
D
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
If C = $400, I = $100, G = $50, NX = $30, and NFP = $5, how much is GDP?
A) $580 B) $575 C) $585 D) $550
Among the countries that use the euro, the real exchange rate ________ and the nominal exchange rate ________
A) is fixed; is fixed B) is fixed; can change C) can change; is fixed D) can change; can change
If the government's provision of a subsidy is too large to counteract the entire effect of a positive externality, the:
A. quantity consumed will become even lower. B. quantity consumed will become too high. C. total surplus will be maximized. D. None of these statements is true.