If potential output for an economy equals $8 billion, and actual output equals $7 billion, then this economy has a(n):
A. recessionary gap.
B. budget deficit.
C. expansionary gap.
D. trade deficit.
Answer: A
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The producer price index was earlier known as _____
a. the retail price index b. the commodity market index c. the Fischer index d. the wholesale price index e. the cost of living index
Which of the following events must cause equilibrium quantity to rise?
a. demand increases and supply decreases b. demand and supply both decrease c. demand decreases and supply increases d. demand and supply both increase
Suppose the maintenance margin is $2,000 per contract. How much must you deposit in your brokerage account if you want to sell 20 futures contracts?
A. $2,000 B. $40,000 C. $44,000 D. $200,000
You are hired as an economic consultant to The Pampered Pet Shop. The Pampered Pet Shop operates in a perfectly competitive industry. This firm is currently producing at a point where market price equals its marginal cost. The Shop's total revenue exceeds its total variable cost, but is less than its total cost. You should advise the firm to
A. produce in the short run to minimize its loss, but exit the industry in the long run. B. cease production immediately because it is incurring a loss. C. lower its price so that it can sell more units of output. D. raise its price until it breaks even.