If unemployment is above the natural rate of unemployment, then potential GDP is:
. Equal to the GDP gap
b. Greater than actual GDP
c. Less than actual GDP
d. Equal to actual GDP
b. Greater than actual GDP
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What is a long-run supply curve? What does a long-run supply curve look like on a perfectly competitive market graph?
What will be an ideal response?
One of the main tools used by economists to measure the actual distribution of income is
a. the Lorenz curve b. the Golden Rule c. the MR = MC rule d. the MRP = MRC rule e. the capital / labor ratio
The value of cross elasticity of demand between orange soda and grape soda is
a. negative b. positive c. 0 d. between –1 and 0 e. less than –1
Which of the following statements is correct?
a. A decrease in the size of a tax always decreases the tax revenue raised by that tax. b. A decrease in the size of a tax always decreases the deadweight loss of that tax. c. Tax revenue decreases when there is a small decrease in the tax rate and the economy is on the downward-sloping part of the Laffer curve. d. An increase in the size of a tax leads to an increase in the deadweight loss of the tax only if the economy is on the upward-sloping part of the Laffer curve.