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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The profits of a proprietorship are
A) taxed at the same rate as the owner's other personal income. B) subject to a corporate tax. C) taxed as capital gains indexed for inflation. D) exempt from taxation.
If Gloria is woman in a developing country, then it is likely that
a. she is less educated than most men in her country b. her brother has dropped out of high school, but not she has graduated c. she has more employment opportunities and earns higher wages than her male classmates d. she and other women will not have to work long hours in agriculture e. she has special access to resources such as land, capital, and technology
The net result of deflation is to:
A. reduce the level of aggregate supply in the economy. B. be neutral and not affect the aggregate demand in the economy. C. increase the level of aggregate demand in the economy. D. reduce the level of aggregate demand in the economy.
The data points on a supply curve come from
A. the same place from which we get the data points on a demand curve. B. the supply schedule. C. companies' annual reports. D. survey analysis.