The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A
B. recessionary; C
C. recessionary; B
D. expansionary; A
Answer: D
You might also like to view...
Refer to Figure 11-2. Diminishing returns to labor set in
A) after L1. B) after L2. C) after L3. D) immediately.
Maximizing profit means finding the maximum difference between:
a. TR and TC. b. MR and MC. c. price and ATC. d. price and AR. e. ATC and MC.
If the government wishes to increase GDP by $1,200b, and the MPC is 0.75, it should:
A. increase its spending by $300b. B. decrease its spending by $300b. C. increase its spending by $900b. D. decrease its spending by $900b.
Which of the following provides the best summary of the basic idea of public choice analysis?
a. Public choice analysis applies the principles of economics to political science topics. b. Public choice analysis takes the principles of political science and applies them to the traditional topics of economics. c. Public choice analysis uses the principle of majority rule to determine the efficiency of an action. d. Public choice analysis indicates there is a sharp distinction between economic and political topics.