An above full-employment equilibrium is
A) a theoretical possibility but cannot happen in reality.
B) the equilibrium in which the economy is in most of the time.
C) when real GDP exceeds potential GDP.
D) the period of time when prices are falling.
C
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In the simple Keynesian cross model with no government or foreign sectors, the value of the multiplier is defined as
A) 1/(MPC - 1). B) 1/(1 - MPC). C) 1/(MPC + 1). D) 1/MPC.
Judging from this graph, which of the following happens if supply remains unchanged and demand increases?
a. Quantity becomes indeterminate.
b. Quantity falls.
c. Price falls.
d. Price rises.
A monopolist engages in price discrimination
A) by charging a higher price to consumers whose demand is more elastic. B) by charging a higher price when marginal cost is lower. C) by charging a lower price to consumers whose demand is more elastic. D) by charging the same price to all consumers.
Assume that the tuna fishing industry is perfectly competitive. Which of the following best characterizes the industry if, as demand for tuna increases, fishing boats have to go farther into the ocean to harvest tuna?
A) a constant-cost industry B) an increasing-cost industry C) a decreasing-cost industry D) a fixed-cost industry