The gap that exists when equilibrium real GDP is greater than the level of real GDP shown by the position of the long-run aggregate supply curve is
A. the short-run aggregate supply curve.
B. an inflationary gap.
C. money illusion.
D. a recessionary gap.
Answer: B
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Refer to Figure 16-1. Suppose the economy is in a recession and expansionary fiscal policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) B to A. B) C to B. C) B to C. D) A to B. E) A to E.
Of the following high-income countries, which has the lowest infant mortality rate?
A) Canada B) Japan C) the United Kingdom D) the United States
All of the following are non-price factors that influence demand except:
A) tastes and preferences. B) quantity supplied. C) income. D) the prices of related goods.
If the government wants to raise tax revenue and shift most of the tax burden to the consumers, it would impose a tax on a good with a
a. flat (elastic) demand curve and a steep (inelastic) supply curve. b. steep (inelastic) demand curve and a flat (elastic) supply curve. c. steep (inelastic) demand curve and steep (inelastic) demand curve. d. flat (elastic) demand curve and a flat (elastic) supply curve.