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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You want to run a difference-in-difference experiment with a price increase for the bacon cheeseburger item on your menu. If you are worried about "leakage" with your control group, a good comparison menu item would be
a. soft drink sales b. the bacon burger without cheese c. the bacon-lettuce-and-tomato sandwich d. the regular cheeseburger
Speculation in exchange markets is often thought of as conducive to wild fluctuations in exchange rates. In practice it appears that speculators
a. have destabilized several currencies that were at sustainable equilibrium levels. b. have no effect in fixed rate systems. c. in fact tend to stabilize exchange rates rather than destabilize them. d. All of the above are correct.
If a firm has a market price of 3, a profit maximizing output level of 70, and an ATC of $2, what would be the total economic profit?
a. $33 b. $70 c. $134 d. $350
The argument that tariffs should be imposed when a foreign government provides financial assistance to its producers is
A. a national defense concern. B. dumping. C. the infant industry argument. D. to counter foreign subsidies.