The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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If the price of salt increases and the quantity demanded does not change, then
A) the price elasticity of demand is equal to zero. B) demand is perfectly inelastic. C) the demand curve for salt is horizontal. D) Both answers A and B are correct.
BHP Billiton is a Canadian company that owns mines in Canada that
A) produce nickel. After World War II, BHP Billiton began to compete with another Canadian firm, the International Nickel Company. This competition eventually ended International Nickel's monopoly in this market. B) produce coal. Until World War II, BHP Billiton had a monopoly on coal in Canada. C) produce bauxite, the mineral needed to produce aluminum. BHP Billiton began to mine bauxite after World War II. This competition eventually ended the Aluminum Company of America (ALCOA)'s monopoly in this market. D) produce diamonds.
Because it takes time for workers to search for a job and for firms to search for new employees, there will always be some workers who are
A) frictionally unemployed. B) structurally unemployed. C) cyclically unemployed. D) seasonally unemployed.
How does a decline in the real interest rate cause an increase in investment?
What will be an ideal response?