When there is a recessionary gap:
a. Real output exceeds the natural level of real output.
b. Real output equals the natural level of real output
c. Real output is less than the natural level of real output.
d. Any of the above is possible.
c
You might also like to view...
People can reduce the inflation tax by
a. reducing savings. b. increasing deductions on their income tax. c. reducing cash holdings. d. None of the above is correct.
Recall the Application about price discrimination using refillable soda bottles to answer the following question(s).According to the Application, how does the firm earn a larger profit through the refillable soda bottles?
A. The consumers who were not likely to buy the soda get a lower price, making them more likely to purchase soda. B. The seller saves money from recycling the disposable bottles. C. The seller earns more revenue from sale of the expensive recyclable bottles. D. The consumers advertise to friends that the seller gives discount through refillable bottles, causing an increase in demand.
Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
According to the graph shown, if the market goes from equilibrium to having its price set at $10 then:
A. the market ceases to be efficient. B. deadweight loss will occur. C. total surplus will decline. D. All of these are true.