The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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The state of Georgia offers free college tuition to high school students with a "B" average. In 2007, the state raised the requirement so that fewer students qualified for the scholarship
At the same time, Georgia increased state spending on health care. Suppose that college education is on the vertical axis and health care is on the horizontal axis of a PPF. These changes A) are example of a tradeoff. B) are an example of incentives. C) will cause a shift out of the PPF. D) will cause a shift in the of the PPF.
The market supply of labor curve has a positive slope if higher wages induce households to choose
A) leisure rather than supplying labor in the labor market. B) supplying labor in the labor market rather than leisure. C) demanding labor rather than supplying it. D) None of the above answers is correct.
In the Solow growth model, given the values of A, s, n, and d, the economy has an equilibrium growth rate of real GDP equal to
A) s. B) n. C) n + d. D) n - d. E) s - d.
A firm is more likely to invest in new capital if
A. the productivity of capital is high. B. it expects future sales to grow. C. it has no excess capital. D. all of the above.