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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A firm that has the ability to control to some degree the price of the product it sells
A) is also able to dictate the quantity purchased. B) faces a perfectly inelastic demand curve. C) is a price maker. D) faces a demand curve that is inelastic throughout the entire range of market demand.
With respect to prices, at the macroeconomic level attention is focused on relative prices, while at the microeconomic level attention is focused on absolute prices
Indicate whether the statement is true or false
Acme Tools manufactures anvils, a forging tool. When the price of anvils was increased from $7 to $13, Acme Tools was willing and able to increase production from 1 to 4 units per day. Using the midpoint formula, what is Acme's price elasticity of supply for anvils?
a. 2 b. 1 c. 0.5 d. 4 e. 3.5
If the percent change in nominal GDP is 3 percent and inflation is 4 percent, the percent change in real GDP is:
A. 1 percent. B. 2 percent. C. -1 percent. D. 0 percent.