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
Answer: A
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A rise in the U.S. price level brings a ________ in the price of U.S. exports relative to imports that ________ exports of U.S. goods, bringing ________ in the quantity of U.S. real GDP demanded
A) fall; increases; an increase B) rise; decreases; a decrease C) fall; decreases; a decrease D) rise; increases; a decrease E) rise; increases; an increase
The level of transactions costs is relevant to the resolution of property rights problems
a. True b. False
The long-run industry supply curve in perfect competition is derived from the
A. short-run industry supply curve which shifts as new firms enter the industry. B. short-run industry supply curve which shifts as old firms exit the industry. C. freedom of firms from sunk costs so that new cost curves become long-run curves. D. All of the reasons listed.
The expansionary phase of the business cycle is characterized by
a. decreasing real output and increasing unemployment. b. decreasing real output and declining unemployment. c. increasing real output and increasing unemployment. d. increasing real output and declining unemployment.