A recessionary gap occurs when
A. the price level is too low.
B. equilibrium real GDP is greater than potential GDP.
C. equilibrium real GDP falls short of potential GDP.
D. the government does not stimulate investment spending.
Answer: C
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When a city licenses only 3 taxi firms to serve the market, the city has created a
A) cartel. B) legal monopoly. C) monopolistically competitive market. D) legal oligopoly. E) natural oligopoly.
The economic system of the United States
A) was designed by mercantilists and capitalists. B) was designed by the framers of the U.S. constitution. C) was designed to maximize individual freedom. D) was designed to maximize output per capita. E) was the result of human intentions but not anyone's design.
The additional benefit to a consumer from consuming one more unit of a good or service
A) is equal to economic surplus. B) is equal to marginal benefit. C) is equal to the opportunity cost of consuming the good or service. D) is equal to consumer surplus.
A policy that increases saving
a. will worsen economic growth, but improve health outcomes. b. will worsen economic growth and health outcomes. c. will improve economic growth, but worsen health outcomes. d. will improve economic growth and health outcomes.