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
You might also like to view...
Describe the state of affairs in the developing world concerning social overhead capital?
What will be an ideal response?
The Keynesian perspective supports that government should play a very active role in managing the economy.
Select whether the statement is true or false. A. True B. False
There are ten states in the democratic nation of Katlandia, and each state has ten thousand residents. Although incomes vary, each Katlandian pays a tax equal to the total cost of all government projects divided by the number of residents in the country. Currently, two states each have one army base. An army base adds $2 million to a state's local economy each year. In addition, in terms of increased security, the annual marginal benefit to Katlandia of having an additional army base is shown below. The total cost of an army base is $8 million per year.
The marginal benefit of adding a third army base equals the local marginal benefit of $2 million plus
the marginal benefit to Katlandia of ________. A. $22.5 million B. $0 C. $1 million D. $3 million
In investment matters, generally young workers compared to older workers will:
A. be more risk-averse. B. be less risk-averse. C. have equal concern for expected return and variability. D. minimize expected return and focus more on variability.