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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The reason that the coffeehouse market is monopolistically competitive rather than perfectly competitive is because:
When the government uses tax revenue to pay off portions of the national debt, total purchasing power in the economy
a. increases. b. decreases. c. is not affected at any level. d. remains the same but changes individually.
The water and diamonds paradox can be explained by considering:
(a) Marginal Utility. (b) The difference between inferior and luxury goods. (c) Long run costs. (d) It cannot be explained.
A tax on an imported good that raises its price is called a
A. tariff. B. quota. C. comparative advantage. D. comparative disadvantage.