What was not an effect of the Great Depression?
A. Policy makers recommended boots in government spending after recessions.
B. Policy makers believed reductions in taxes would promote growth.
C. The government limited its role in correcting the economy.
D. The Federal Reserve increased its role in correcting the economy.
Answer: C
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Suppose the country of Dingo experienced an economic trough in January 2011. We can conclude that
A) real GDP in Dingo was increasing in January 2011. B) an expansion occurred after January 2011. C) Dingo did not experience a recession in 2010. D) Dingo's potential GDP fell in 2011.
The U.S.'s high trade deficit must be balanced by:
A. net capital inflows. B. high net capital outflows. C. low net capital outflows. D. None of these statements is true.
Refer to the information provided in Figure 15.1 below to answer the question(s) that follow. Below are cost curves for Dom's Barber Shop, a monopolistically competitive firm. 
Figure 15.1 Refer to Figure 15.1. If Dom's Barber Shop is maximizing profit, it is earning a profit of
A. $0. B. $80. C. $120. D. $320.
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline