Based on the diagram, if potential output equals 8,000 and the real interest rate is 2 percent, then there is ________ gap and the Fed must ________ the real interest rate so that output will equal potential output. 
A. a recessionary; raise
B. no output; not change
C. an expansionary; reduce
D. an expansionary; raise
Answer: D
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The above figure shows the domestic market for tomatoes. Suppose this market is isolated from global competition and there is a support price set at $16. In this figure, what area equals the producer surplus?
A) area A + area B + area C B) area A + area F C) area B + area C + area D + area F D) area C + area D + area E + area G E) area F
If you buy a brand new, American-made laptop computer to use for taking notes in your economics class, then it will be classified in GDP accounting as
a. a business inventory b. a consumption expenditure c. an investment expenditure d. a household expenditure e. a service good
Which of the following conditions is TRUE for both the perfectly competitive firm and the monopoly at the profit-maximizing output level?
A. MC = P B. MR = P C. MR = MC D. MC = ATC
Which of the following was not claimed in the book Time on the Cross, by Fogel and Engerman (1974)?
(a) Slavery was growing stronger economically before the Civil War. (b) Slave agriculture in the South was more productive than was family farming in the North. (c) Slave breeding and sexual exploitation by slave owners were normal aspects of the slave system. (d) Slave field hands were harder working and more efficient than were white agricultural workers.