The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A
B. recessionary; C
C. recessionary; B
D. expansionary; A
Answer: D
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The cost of a one-unit increase in an activity
A) is called the total one-unit cost. B) is called the marginal cost. C) decreases as more of the activity is done. D) is called the marginal benefit/cost. E) is called the unit cost.
When graphed, variables that are unrelated are shown by either a horizontal or a vertical line
Indicate whether the statement is true or false
A natural monopoly that is regulated to set its price according to the marginal cost pricing rule will
A) incur an economic loss. B) maximize its profit. C) produce a quantity of output such that price is above average total cost. D) produce a quantity of output such that marginal cost is above average total cost.
The life-cycle hypothesis predicts there to be a rather ________ short-run multiplier and thus a rather ________ private economy
A) low, unstable B) low, stable C) high, unstable D) high, stable