The amount by which aggregate expenditures exceed those associated with the full- employment level of domestic output can best be described as:
A. A recessionary expenditure gap
B. An inflationary expenditure gap
C. The multiplier
D. The average propensity to save
B. An inflationary expenditure gap
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What is a supply shock? What is a demand shock? Describe an example of a supply shock and of a demand shock
What will be an ideal response?
Which of the following might increase the supply curve of labor?
a. Easing licensing requirements. b. Elimination of discrimination against blacks. c. All of the answers are correct. d. Elimination of discrimination against females.
Which of the following statements about the way markets allocate resources is most accurate from society's perspective?
A. Markets always fail to allocate resources properly, so we must rely on the government to determine the proper use of our resources. B. The market may not always allocate resources in a way that is in society's best interest. C. Resource allocation by markets may not be perfect, but it is always better than government allocation of resources. D. The market always allocates resources in the best way.
A player can choose among three strategies: L, C, and R. Strategy C is never a best response to the other player strategies. This means that
A) strategy C is always played. B) strategy C is never played. C) strategy C will be part of a Nash equilibrium. D) strategies L and R are never played.