Assuming QF is the full employment equilibrium then a shift from AD1 to AD2 in Figure 11.2 will
A. Eliminate the GDP gap.
B. Cause significant inflation.
C. Worsen the existing unemployment problem.
D. Reduce, but not close, the GDP gap.
Answer: D
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A change in which of the following changes the supply of dollars and shifts the supply curve of dollars?
I. an increase in the exchange rate II. a change in interest rates III. a decrease in the expected future exchange rate A) I B) I and II C) II and III D) I, II, and III
Regulation might NOT increase total surplus because
A) the costs of the regulation might outweigh the benefits. B) it may not be possible to gather the information necessary to set prices correctly. C) regulators might get captured by the industry. D) All of the above.
Ways to "game" the budgeting process include
a. delaying sales if just short of a target b. delaying expenses if just short of a target c. accelerating sales once a target is met d. delaying expenses costs once a target is met
Any deviation from the efficient scale of production would result in a(n): a. decreased marginal cost
b. increased marginal cost. c. increased average total cost. d. decreased average total cost.