A recessionary gap exists when aggregate demand is above the full employment level of output.
Answer the following statement true (T) or false (F)
False
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? In Figure 5-13, the consumer can afford any combination of X and Y represented by a point
A. on line AB only. B. on or below line AB. C. on or above line AB. D. anywhere on the graph.
Which of the following is an example of a situation where a third party benefits from a market transaction by others?
a. Inoculation against communicable diseases b. An increase in the level of air pollution in neighborhoods near a power plant c. Allowing a chemical company to use a natural lake to discharge waste d. Two firms trading pollution credits to avoid reducing their toxic emissions
Using the basic supply/demand framework, economic analysis of market structure leads to the conclusion that:
A. oligopoly promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss. B. monopolistic competition promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss. C. monopoly promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss. D. perfect competition promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss.
If the interest rate is 7 percent, the value of $350 today after one year would be
A. $357.00. B. $362.50. C. $374.50. D. $387.75.