In a diagram of aggregate demand and supply curves, the AD shortfall is measured as the
A. Horizontal distance between the aggregate demand curve necessary for full employment and the aggregate demand curve that intersects AS at the equilibrium price.
B. Vertical distance between the recessionary GDP gap and the inflationary GDP gap.
C. Horizontal distance between the equilibrium output and the full-employment output.
D. Vertical distance between the equilibrium price and the price at which the aggregate demand would intersect aggregate supply at full employment.
Answer: A
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The issue of Fed independence is most often raised by
A) disagreement over the role the Fed should play in managing monetary policy. B) the Fed's refusal to carry out the wishes of the President. C) the Fed's refusal to carry out the wishes of Congress. D) the public's negative reaction to Fed policy.
Hughes and Cain (2011) suggest that an event or series of events occurring in 1763 doomed British policy. What happened?
(a) A series of oppressive taxes (b) A tightening and more rigorous enforcement of the Navigation Acts (c) A proclamation which limited trans-Appalachian settlement to lands once granted to colonists by crown approval (d) An act that gave the Quebec province all the land west of the Ohio River
The demand for xenite ore is fixed over time and is given as:
q = 40 - P where q is the number to tons of ore produced and P is the price per ton of xenite ore. The marginal extraction cost is $15 per ton and is also constant over time. The total quantity of the resource currently known to exist is 53.29 tons. The interest rate is 10 percent. Using the Hotelling rule for an exhaustible resource, complete the following table. Time Period Price Marginal Cost q Cumulative Production Today 15 1 Year 15 2 Years 15 3 Years 15 4 Years 15 5 Years 15 6 Years 15 7 Years 40.00 15 0 53.29
The marginal tax rate on labor income for many workers in the United States is almost
a. 30 percent. b. 40 percent. c. 50 percent. d. 65 percent.