Based on the given figure, the economy is initially in long-run equilibrium at point A. If there is a favorable supply shock that increases potential output and shifts the long-run aggregate supply curve from LRAS to LRAS', then there is initially ________ gap and the short-run aggregate supply curve will ________.
A. an expansionary; eventually shift to SRAS"
B. a recessionary; eventually shift to SRAS"
C. an expansionary; eventually shift to SRAS'
D. a recessionary; eventually shift to SRAS'
Answer: B
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In an economy with no income taxes or imports, the marginal propensity to consume is 0.80. The expenditure multiplier is
A) 1.25. B) 10.0. C) 0.80. D) 5.00. E) 0.20.
The opportunity cost of owner-provided labor is the
A) wage rate paid to the owner. B) explicit part of the wage rate paid to the owner. C) salary the owner could have made if she worked at her best alternative job. D) profit after all of the bills have been paid.
In a typical economy, the dollar value of the total output for a period will equal the sum of consumption spending, planned investment spending, government spending, and net tax revenue
a. True b. False
Until the _______, most Americans had an unfavorable opinion of labor unions.
Fill in the blank(s) with the appropriate word(s).