The laissez-faire system relies on the price mechanism to allocate resources.
Answer the following statement true (T) or false (F)
True
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
In the equation, GDP = C + I + G + X - M, G refers to
A) federal government expenditures plus all transfer payments. B) local, state, and federal government spending for all purposes. C) the taxes and expenditures of all government units. D) local, state, and federal government expenditure on goods and services, but does not include transfer payments.
What is an export subsidy? Discuss some of the recent examples where such subsidies were controversial
MC = AVC and MC = ATC at points at which
A. the AVC and ATC curves are at their respective minimums. B. the distance between the ATC and AVC curves is at its maximum. C. the distance between the ATC and AVC curves is at its minimum. D. the AVC and ATC curves are at their respective maximums.