The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
You might also like to view...
Imagine that you are an entrepreneur, making designer t-shirts in your garage. Your total cost (in dollars) is given by the equation TC = 300 + 10Q, where Q represents the number of t-shirts you make. If you make 1,000 t-shirts, your average total cost is ________.
A. $1.03 B. $3 C. $10.30 D. $3.10
In many corporations, the managers of the corporation run the corporation, although the shareholders own the corporation. In this situation
A) there is no corporate governance. B) there is separation of ownership from control. C) there are no outside directors on the board of directors. D) there are no inside directors on the board of directors.
According to real business cycle theorists, an increase in total factor productivity could lead to an increase in the nominal money supply due to
A) the cyclical behavior of tax collections and attempts by the Federal Reserve to stabilize real output. B) the Federal Reserve's attempts to stabilize real output and the price level. C) the Federal Reserve's attempts to stabilize the price level and banking sector expansion of deposit money. D) banking sector expansion of deposit money and the cyclical behavior of tax collections.
Refer to the below graph of a representative firm in monopolistic competition. If curve (2) represents ATC and line (3) represents demand, then we can conclude that the industry:
A. Has positive economic profits
B. Is in long-run equilibrium
C. Will contract in the long run
D. Is not maximizing profits