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
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The future value of a sum of money deposited in a bank will be higher if ________
A) the rate of interest is low B) the rate of inflation is low C) the returns on other assets are low D) the money is kept in the bank for a longer period of time
The fact that our wants are unlimited but our resources are limited implies that
A) we should limit our wants. B) entrepreneurship has failed as an economic system. C) we have to make choices. D) the only way to make someone better off is to make someone else worse off.
A technological improvement in the production of tablets would
A) increase the demand for tablets. B) increase the supply of tablets. C) decrease the demand for tablets. D) decrease the supply of tablets.
Refer to the market for loanable funds, as shown in the above graph. A decline in the interest rate is likely to:
A. Lower capital investment B. Increase the quantity of loanable funds demanded C. Come about when there is a shortage of loanable funds D. Result from an increase in the desire of firms to borrow funds