Movement along the curve from point A to point B represents a change in ______ in response to price level changes.
a. wages
b. output
c. input
d. rents
b. output
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The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
The concept of adverse selection helps to explain
A) why collateral is not a common feature of many debt contracts. B) why large, well-established corporations find it so difficult to borrow funds in securities markets. C) why financial markets are among the most heavily regulated sectors of the economy. D) why stocks are the most important source of external financing for businesses.
Economic models
a. are not useful because they omit many real-world details. b. are usually composed of diagrams and equations. c. are useful because they do not omit any real-world details. d. are usually plastic representations of the economy.
Refer to the graph shown.
Suppliers producing L will spend up to area(s) ________ to limit output to L.
A. A B. B C. A and B D. B and D