An accounting identity
A) ensures that all balances will be in equilibrium.
B) is useless in analyzing balance of payments since one cannot tell from the identity whether an equilibrium exists or not.
C) ensures a balance but does not ensure an equilibrium.
D) applies only to plans of economic agents and not to their actual actions.
Answer: C
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Refer to Figure 2-18. Which two arrows in the diagram depict the following transaction: Lizzie Haxem hires "The Paint Pros," a professional painting company, to paint her home
A) K and G B) K and M C) J and G D) J and M
The burden of a site value tax will be borne entirely by the site owner _____
a. because the demand for land is elastic b. when the site owner is forced to remit the tax c. because the supply of land is completely inelastic d. when the supply of land is unitary elastic
Answer the following questions true (T) or false (F)
1. A prisoner's dilemma leads to a noncooperative equilibrium. 2. A member of a cartel earns more profits by producing more than its quota and selling at a price higher than the cartel's price. 3. Collusion is common in oligopoly and monopolistically competitive industries.