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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Pat used to work as an aerobics instructor at the local gym earning $35,000 a year. Pat quit that job and started working as a personal trainer. Pat makes $50,000 in total annual revenue. Pat's only out-of-pocket costs are $12,000 per year for rent and utilities, $1,000 per year for advertising and $3,000 per year for equipment. For Pat to earn normal profit, Pat's accounting profit would have to be ________.
A. 0 B. $35,000 C. $50,000 D. $15,000
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential
The market level (magnitude) of economic rent is determined by the
a. supply side of the market. b. demand side of the market. c. intersection of supply and demand. d. elasticity of demand for land.
Why are utils a useful unit of measure?
a. Utils demonstrate the relative levels of satisfaction a good delivers to multiple consumers. b. Utils demonstrate the relative levels of satisfaction goods deliver to a given consumer. c. Utils can be used to model the sometimes-irrational decisions consumers make. d. Utils can be used to prove that marginal utility and total utility are independent of one another.