If the equilibrium level of real GDP per year is greater than the full-employment level of GDP, then
A. the economy is at full employment with no price changes.
B. a recessionary gap occurs.
C. an inflationary gap occurs.
D. the economy expands the level of real GDP.
Answer: C
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The government might engage in expansionary fiscal policy if it wanted to
A) shift the aggregate demand curve to the left. B) reduce the level of unemployment. C) reduce real GDP. D) reduce the price level.
Refer to Figure 6-1. The demand curve on which elasticity changes at every point is given in
A) Panel A. B) Panel B. C) Panel C. D) none of the above graphs.
Distinguish between predatory pricing strategy and bundling strategy
"Net exports" rather than "exports" are included in demand/expenditures, because:
a. Actually, exports are included and not net exports because only exports are a source of demand. b. Imports are counted in personal consumption expenditures. Therefore, net exports instead of just exports are included in aggregate demand. c. Imported goods and services are a part of personal consumption, gross private domestic Investment, and government spending. Therefore, net exports instead of just exports are included in demand. d. Neither exports nor net exports is included in aggregate demand. e. None of the above.