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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Assuming perfect asset substitutability, can sterilized intervention by the central bank be effective? Please discuss
What will be an ideal response?
In order to sell an additional unit of its product, a monopolist must decrease price on all units
a. True b. False
If Martin sells a shirt for $40, and his producer surplus from the sale is $8, his cost must have been
a. $48. b. $32. c. $8. d. $40.
Which of the following is a market imperfection that might explain persistent wage differentials within an occupation?
A. Geographical immobility of workers. B. Readily available information about job opportunities and pay. C. Principal-agent problems. D. Compensating wage differentials.