Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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Private firms and public bureaus differ in the sense that public bureaus
a. sometimes have top-level managers chosen by shareholders b. sell most of their output on a per unit basis c. receive most of their revenues through a budget appropriation rather than through the sales of goods or services d. are sometimes inefficient e. hire consultants to solve difficult problems
If price exceeds average total cost
a. the firm earns an economic profit b. there are a large number of buyers and sellers c. the firm suffers an economic loss d. the firm closes down e. the firm should reduce its production
One of the key factors that determine an economy's real GDP is labor productivity, which is a measure of
a. output per hour of work. b. labor force per hour. c. input per hour worked. d. total hours worked.
The type of advertising used for a search good is
A) informational advertising. B) persuasive advertising. C) search advertising. D) experience advertising.