When aggregate expenditure exceeds the level needed to generate a full-employment, noninflationary equilibrium, then a recessionary gap exists
Indicate whether the statement is true or false
F
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Costs as measured by accountants generally does not include
A) any of the opportunity costs of the firm. B) any measure of depreciation. C) the economic depreciation of the firm's equipment. D) any rental rates.
Because information and the time required to acquire and digest it are scarce,
a. consumers concentrate on private choices rather than on public choices b. consumers concentrate on public choices rather than on private choices c. it is irrational for consumers to remain ignorant of the costs and benefits of government proposals d. consumers have greater incentive to gather and act upon information about public choices than to gather and act upon information about their private choices e. an individual voter has more incentive to examine the performance records of candidates for public office
If inflation rises or falls faster than people forecast in the short run but not in the long run, what are the shapes of the Phillips curves?
a. The Phillips curve is vertical in the short run, and upward sloping in the long run. b. The Phillips curve is downward sloping in the short run, and vertical in the long run. c. The Phillips curve is upward sloping in the short run, and horizontal in the long run. d. The Phillips curve is vertical in the short run and long run.
Contrast a positive supply shock with a negative supply shock.
a. A positive supply shock increases short-run aggregate supply, whereas a negative supply shock decreases short-run aggregate supply. b. A positive supply shock is an expected event, whereas a negative supply shock is an unexpected event. c. A positive supply shock is permanent, whereas a negative supply shock is temporary. d. A positive supply shock causes the short-run aggregate supply curve to shift leftward, whereas a negative supply shock causes the short-run aggregate supply curve to shift rightward.