To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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Demand tends to be ________ in the short run than in the long run.
A. less elastic B. more variable C. less important D. more elastic
In the above figure, which part corresponds to a destruction of part of the nation's capital stock?
A) Figure A B) Figure B C) Figure C D) Figure D
In economics, abstraction from reality is necessary because of the complexity of the real world.
Answer the following statement true (T) or false (F)
Refer to the following graph.
If this country is producing between point G and Q, it will gain by ________ its production of good A and importing more ________.
A. increasing; good A B. decreasing; good B C. decreasing; good A D. increasing; good B