Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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For a firm in monopolistic competition, the efficient scale is the amount of output at which ________ is a minimum
A) fixed cost B) average total cost C) average variable cost D) average fixed cost E) marginal cost
The rapid growth of China's economy relative to the United States has benefitted U.S. consumers because
A) U.S. consumers can purchase more lower-priced goods made in China. B) competition from China has made jobs harder to find in the United States. C) goods made in China are always of higher quality than goods made in the United States. D) the United States has comparative advantage in more goods than China does.
The net exports effect is the ____ relationship between net exports and the price level of an economy
a. inverse b. independent c. direct d. linear
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4Refer to Figure 2.4. The economy moves from Point E to Point B. This could be explained by
A. a change in society's preferences for hybrid cars versus motorcycles. B. an increase in economic growth. C. an increase in unemployment. D. a reduction in unemployment.