In the above figure, if the economy is in equilibrium at E1, then
A) the economy is producing below its potential long-run equilibrium at full employment.
B) the economy is producing above its potential long-run equilibrium at full employment.
C) there is an inflationary gap in the economy.
D) the economy is in a period of high inflation.
A
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Kate is a florist. Kate can arrange 20 bouquets per day. She is considering hiring her husband William to work for her. William can arrange 18 bouquets per day. What would be the total daily output of Kate's firm if she hired her husband?
a. 18 bouquets b. 19 bouquets c. 20 bouquets d. 38 bouquets
Referring to a production possibilities curve and the goods being compared, depict the economic event. The SARS epidemic spreads rapidly throughout Toronto, Canada claiming millions of lives (capital vs. consumer goods).
A. A movement from a point inside the curve to a point on the curve B. A movement from a point on the curve to a point inside the curve C. A shift in the entire curve to the right (outward) D. A shift in the entire curve to the left (inward)
Which of the following caused a recession in the years immediately following World War II?
A. A surge in investment spending. B. Cutbacks in defense production. C. Technological advances. D. Pent-up demand for consumer goods.
Related to the Economics in Practice on page 68: Assuming the demand for Baltimore newspapers ________ while the supply of Baltimore newspapers ________, the equilibrium price will definitely decrease.
A. increases; increases B. decreases; decreases C. decreases; increases D. increases; decreases