Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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When determining value added, national income accounting systematically ignore
A) accounting profits. B) economic profits. C) accounting losses. D) the expected market value of unsold inventory.
The expenditure category of GDP that fluctuates the most over time is investment
a. True b. False Indicate whether the statement is true or false
Moral hazard is illustrated by people who take greater risks after they purchase insurance
a. True b. False Indicate whether the statement is true or false
Suppose that the equilibrium price of pickles falls while the equilibrium quantity rises. The most likely explanation for these changes is:
A. a decrease in demand for pickles. B. a decrease in the supply of pickles. C. an increase in demand for pickles. D. an increase in the supply of pickles.