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
Answer: C
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The price of gasoline has risen and the quantity sold has fallen. This was likely caused by
A. a rise in the price of crude oil. B. a seasonal rise in the demand for gasoline. C. use of a new public transit system. D. the discovery of crude oil deposits in South Dakota.
Which type of unemployment leads to a natural rate of unemployment above zero?
A. The natural rate of unemployment is always zero. B. Frictional unemployment C. Unemployment of government workers D. Cyclical unemployment
Consider the statement: "When the British government tripled university fees for foreign students in Great Britain, about one-half of them left to study in other countries." The implied price elasticity of demand by foreigners for a British education is (in absolute value)
A. less than 1. B. equal to 1. C. greater than 1.5. D. between 1.0 and 1.5.
Suppose Sarah has been offered a position as web designer at Firm A and Firm B. Both firms require their employees to work for 9 hours a day, but Firm A allows its employees to have a flexible work schedule, while Firm B requires its employees to be at work from 9am to 5pm. Otherwise, the jobs are identical. You would expect:
A. Sarah's wages to be the same at both firms. B. Sarah's wages to be lower at Firm A than at Firm B. C. Sarah's wages to be higher at Firm A than at Firm B. D. Sarah to turn down both job offers.