An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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Lou buys a Star Wars: The Force Awakens poster from Evan for $30 and resells it on eBay for $60. Which of the following statements is false?
A) Lou has probably incurred some costs in connection with this sale. B) It is possible that Evan has earned some producer surplus from this transaction. C) Lou has earned some arbitrage profits, assuming that transactions costs are negligible. D) The transaction has made Evan worse off because he undersold the poster.
If, beginning from a competitive labor market, some workers form a union and negotiate a higher rate for themselves, which of the following is likely to happen? a. Competition will force the wage rate in the non-union sector to increase to the level of the union wage. b. The marginal product of labor curve will increase in the unionized sector
c. Employment will move from the union to the non-union sector over time. d. Employment will increase in the union sector because workers will be attracted by the higher union wage.
What is the name of the organization that defines business cycle peaks and troughs in the United States?
A) the Bureau of Labor Statistics B) the Federal Reserve C) the National Bureau of Economic Research D) the National Peak and Trough Committee
Refer to the diagram for a private closed economy. Aggregate saving in this economy will be zero when:
A. C + I g cuts the 45-degree line.
B. GDP is $180 billion.
C. GDP is $60 billion.
D. GDP is also zero.