If potential output equals $8 billion and actual output equals $9 billion, then this economy has a(n):
A. trade deficit.
B. recessionary gap.
C. expansionary gap.
D. budget deficit.
Answer: C
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Assume two nations are involved in an arms race. They both assume that each faces two choices – sign disarmament accord or continue with military expansion and the building of more nuclear missiles
Explain using the prisoner's dilemma model why both of these nations will choose to escalate the arms race rather than choose bilateral disarmament. During the Cold War President Ronald Reagan was quoted as saying that the United States will "trust, but verify" when discussing nuclear nonproliferation agreements between the U.S. and the Soviet Union. How does this relate to your answer to the first part of this question?
Which of the following is true for a lower price elasticity of demand coefficient?
a. The market is broadly defined. b. The quantity demanded is more responsive. c. Few substitutes exist. d. Many substitutes exist. e. All of these.
Low-income countries are classified as having
a. less than $1,025 per capita income. b. less than $5,000 per capita income. c. less than $9,190 per capita income. d. less than $12,475 per capita income.
Without externalities, _____
a. private costs equal social costs b. private benefits exceed social benefits c. private costs are greater than social costs d. private benefits are lesser than social benefits