Which of the following, if true, would suggest that an expansionary gap exists in an economy?
What will be an ideal response?
an unemployment rate below its natural rate and an unexpected increase in the consumer price index
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Given the total cost and total revenue curves in the above figure, what are the output levels at which the perfect competitor will incur economic losses?
A) below 80,000 bushels B) from 30,000 to 80,000 bushels C) below 30,000 bushels and over 80,000 bushels D) at 30,000 bushels and at 80,000 bushels
Expansionary policy only leads to inflation, but does not raise output in ________
A) traditional Keynesian theory B) new Keynesian theory C) real business cycle theory D) traditional Keynesian, new Keynesian and real business cycle theory
Wendy claims that the right mix of hamburgers and other goods is being produced, but that they are not being produced in the least costly way. How would an economist assess Wendy's claim?
A. Wendy is asserting that productive efficiency is realized in hamburger production, but not allocative efficiency. Wendy's assertion cannot be correct. B. Wendy is asserting that allocative efficiency is realized in hamburger production, but not productive efficiency. Wendy's assertion may be correct. C. Wendy is asserting that productive efficiency is realized in hamburger production, but not allocative efficiency. Wendy's assertion may be correct. D. Wendy is asserting that allocative efficiency is realized in hamburger production, but not productive efficiency. Wendy's assertion cannot be correct.
Suppose we observe the following two simultaneous events in the market for beef. First, there is a decrease in the demand for beef due to changes in consumer tastes. And second, there is a reduction in beef cattle supply due to climate change. We know with certainty that these two simultaneous events will cause which of the following?
A. a decrease in the equilibrium quantity and an indeterminate change in the equilibrium price B. a decrease in the equilibrium quantity and an increase in the equilibrium price C. an increase in the equilibrium quantity and in the equilibrium price D. no change in the equilibrium quantity and a reduction in the equilibrium price