The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A
B. recessionary; C
C. recessionary; B
D. expansionary; A
Answer: D
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In a case where there are two possible work activities and two workers, which of the following is true regarding to comparative advantage?
a. One person can have a comparative advantage in both activities. b. Both people can have a comparative advantage in both activities. c. No one can have a comparative advantage in either activity. d. Each person must have a comparative advantage in one activity, but not both.
A cartel is a group of firms
A) acting separately to limit output, lower price, and decrease economic profit. B) acting together to limit output, raise price, and increase economic profit. C) legally fixing prices. D) acting together to erect barriers to entry. E) that compete primarily with each other rather than the other firms in the market.
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and current international transactions in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and current international transactions become more positive (or less negative). b. There is not enough information to determine what happens to these two macroeconomic variables. c. The quantity of real loanable funds per time period rises, and current international transactions become more negative (or less positive). d. The quantity of real loanable funds per time period rises, and current international transactions remain the same. e. The quantity of real loanable funds per time period and current international transactions remain the same.
Apartment dwellers near Wrigley Field in Chicago are often able to watch the Chicago Cubs baseball team play from the roof of their apartment building, without having to pay the cost of buying a ticket. This is an example of a:
a. marginal social cost. b. negative externality. c. positive externality. d. deadweight loss.