In recent years, the demand for orange juice in the United States has fallen and the supply of orange juice has also fallen, with the decrease in supply being larger than the decrease in demand. In this situation, the equilibrium price of orange juice
will have ________ and the equilibrium quantity of orange juice will have ________.
A) decreased; increased
B) decreased; decreased
C) increased; decreased
D) increased; increased
Answer: C
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When actual output is less than potential output, there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; increase B. a recessionary; increase C. an expansionary; decrease D. a recessionary; decrease
Which of the following is NOT included in aggregate expenditure?
A) government expenditure B) consumption expenditure C) net exports D) taxes E) investment
Black market transactions generally increase the deadweight losses created by restrictive government policies
Indicate whether the statement is true or false
An economic expansion rather than a recession occurs
A) when the federal budget is balanced. B) when the unemployment rate falls below 5 percent. C) when growth in real GDP is positive. D) when the unemployment rate is not changing.