The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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In a perfectly competitive market, the process of entry and exit will end when
a. price equals minimum marginal cost. b. marginal revenue equals marginal cost. c. economic profits are zero. d. accounting profits are zero.
The indifference curve in the above diagram yields Juan 100 units of utility. If Juan's money income were to increase by 20 percent, the indifference curve would:
A) shift leftward. B) shift rightward. C) become steeper. D) not be affected.
Refer to Figure 4.6, which shows David's and Celeste's individual supply curves for flower arrangements per week. Assuming David and Celeste are the only producers in the market, if the market quantity supplied is 350, the price must be:
A. $10. B. $20. C. $30. D. $40.
Barriers to entry might include all of the following EXCEPT
A) patents and copyrights. B) ownership of essential resources. C) government franchise. D) positive economic profits.