Using Figure 3 below the distance between what 2 lines illustrate a recessionary expenditure gap?
A. PAE2 to PAE3
B. PAE1 to PAE2
C. Y1 to Y2
D. Y2 to Y3
B. PAE1 to PAE2
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Which of the following would NOT be considered a consumption good?
A) a new sweater B) tools used to cut metal on an auto production line C) a jar of Skippy peanut butter D) a bottle of Scotch whiskey
As the economy moves down an effective labor demand curve,
A. output declines and employment rises. B. output rises and employment rises. C. output rises and employment declines. D. output declines and employment declines.
Investment is the process by which new capital is added to an economy.
Indicate whether the statement is true or false.
Which of the following is true of deadweight loss?
a. It occurs when taxes are imposed on a market b. It occurs when there is a surplus in a market. c. It occurs when there is a shortage in an economy. d. It occurs when there is a budget deficit in an economy.