When the economy is in long-run equilibrium, the price level adjusts so as to equate which two values with one another?
A. government spending and tax revenues
B. total planned real expenditures and total planned production
C. import and export spending
D. the inflation rate and the unemployment rate
Answer: B
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Gains from trade will be possible as long as
A) people have different endowments. B) people place different values on some goods. C) marginal rates of substitution are equal across individuals. D) excess supply equals excess demand.
Adjusting GDP downward for the impact industry has on the environment results in a number that is greatly disputed, but is often referred to as
A. "environment-neutral GDP."
B. "resource-adjusted GDP."
C. "green GDP."
D. "eco-output."
A good synonym for "utility" is
A. satisfaction. B. necessity. C. marginal. D. need.