To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:

A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.


Answer: C

Economics

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A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.

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Suppose a monopolist has TC = 100 + 10Q + 2Q2, and the demand curve it faces is p = 90 - 2Q. What will be the price, quantity, and profit for this firm?

What will be an ideal response?

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Calculate GDP for an economy with exports of $5 trillion, investment of $1.5 trillion, consumption spending of $11 trillion, imports of $6 trillion, and government purchases of $3 trillion

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Which market model has the least number of firms?

A. Pure monopoly B. Pure competition C. Oligopoly D. Monopolistic competition

Economics