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
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The quantity theory of inflation indicates that if the aggregate output is growing at 3% per year and the growth rate of money is 5%, then inflation is
A) 2%. B) 8%. C) -2%. D) 1.6%.
Margarine and butter can both be used as a spread on toast. This means that they are:
a. independent goods. b. complementary goods. c. substitute goods. d. Giffen goods. e. inferior goods.
If monetary policy moves unemployment below its natural rate, both expected and actual inflation will rise
a. True b. False Indicate whether the statement is true or false
A market in which there are neither external benefits nor external costs is:
A. efficient. B. inefficient. C. efficient and equitable. D. impossible.