During the 2016 Summer Olympics in the city of Rio, some Rio residents rented rooms to visitors. This behavior
A) helped reduce the shortage of hotel rooms caused by the high demand during the Olympics.
B) reduced the demand for tickets to the Olympics since many local residents left town while they rented out space in their homes.
C) helped raise the prices that visitors paid for hotel rooms in Rio.
D) raised the demand for hotel rooms in Rio and should have been prevented by the city of Rio.
Answer: A
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A recessionary gap exists when the equilibrium level of GDP exceeds potential GDP.
Answer the following statement true (T) or false (F)
The objects we use as money today include
A) currency inside banks and bank deposits. B) currency outside the banks and bank deposits. C) only currency outside the banks. D) only deposits inside the banks. E) credit cards and debit cards.
If there is persistent inflation
A) long-run aggregate supply is growing at a faster rate than aggregate demand. B) long-run aggregate supply is growing at a slower rate than aggregate demand. C) there is an excess of total planned expenditures. D) long-run aggregate supply is constant.
The table below shows four alternative techniques for assembling a car. The cost of labor is $20 per hour, and the cost of capital is $10 per hour. Which of the four techniques for assembling a car is economically efficient?
A) T-1 B) T-2 C) T-3 D) T-4