Assume that full-employment real GDP is Y = $1,200 billion, the current equilibrium real GDP is Y = $1,600 billion, and the MPC = 0.8. In order to bring the economy to a full-employment real GDP,
A. a recessionary gap must be bridged by increasing aggregate expenditures by $80 billion.
B. an inflationary gap must be bridged by cutting aggregate expenditures by $80 billion.
C. an inflationary gap must be bridged by cutting aggregate expenditures by $400 billion.
D. a recessionary gap must be bridged by increasing aggregate expenditures by $400 billion.
Answer: B
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The clear winners from the quota are the ________, and the losers are the______. 
A. domestic producers; domestic consumers B. domestic consumers; domestic producers C. government; domestic consumers D. importers; domestic producers
Which of the following formulas accurately reflects this graph?
a. P* ($7) + ATC ($8) ? q* (100) = $1,500
b. P* ($7) ? ATC ($8) ? q* (100) = $?100
c. P* ($8) + ATC ($7) ÷ q* (100) = $.15
d. P* ($7) ? ATC ($8) ÷ q* (100) = $?.01
If the demand for a product is perfectly inelastic, the incidence of an excise tax will be:
A. entirely on the buyer. B. mostly on the buyer. C. entirely on the seller. D. mostly on the seller.
Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. higher; potential D. lower; higher