Which of the following is true of an expansionary gap?
a. It develops when the expected price level exceeds the actual price level
b. In the long run, this gap will close when resource suppliers negotiate lower resource payments.
c. It measures the amount by which actual output falls short of the economy's potential.
d. In the long run, this gap will close when the short-run aggregate supply curve shifts rightward.
e. In the long run, this gap will close when resource suppliers negotiate higher resource payments.
e
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The figure above illustrates a linear demand curve. By comparing the price elasticity in the $2 to $4 price range with the elasticity in the $8 to $10 range, you can conclude that the elasticity is
A) greater in the $8 to $10 range. B) greater in the $2 to $4 range. C) the same in both price ranges. D) greater in the $8 to $10 range when the price rises but greater in the $2 to $4 range when the price falls.
A firm will shut down in the short run if
A. P < AVC. B. P > AVC. C. AVC > AFC. D. TR > TC.
The exchange rate is
a. another term for "interest rate." b. another term for "growth rate." c. the rate at which goods trade for one another across international borders. d. the price of one currency in terms of another currency.
Suppose that Amanda receives a pay increase. We would expect
a. to observe Amanda moving down and to the right along her given demand curve. b. Amanda's demand for inferior goods to decrease. c. Amanda's demand for each of two goods that are complements to increase. d. Amanda's demand for normal goods to decrease.