The recessionary gap is the
A. amount of unemployment compensation required during a recession.
B. budget deficit encountered during a recession.
C. amount of government spending needed to end a recession.
D. distance between the equilibrium level of output and the full employment level of output.
Answer: D
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In the IS model, assuming that the real interest rate does not change, an increase in autonomous ________ leads to a decrease in equilibrium saving
A) investment B) consumption C) net exports D) all of the above E) none of the above
Assume that Burger King employees work in an air-conditioned environment while McDonalds employees do not. Other things equal, you would expect wages to be ____ in Burger King because ____.
a. higher; Burger King is a more prestigious place to work b. higher; Burger King employees are more productive c. lower; McDonald's employees are more productive d. lower; Burger King has more favorable working conditions
A difference between economic regulation and social regulation is that
A) the former tends to affect the prices at which products are sold and the latter does not. B) the former tends to affect the profits of firms and the latter does not. C) the former tends to be specific to an industry and the latter tends to affect firms in all industries. D) the former tends to be done at the state level and the latter at the federal level.
When a market is not in equilibrium:
A. a change in either supply or demand is required to reestablish equilibrium. B. there is neither excess supply nor excess demand. C. the economic motives of sellers and buyers will move the market to its equilibrium. D. government intervention is required to achieve equilibrium.