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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As market price increases in the short run, a profit-maximizing firm in a perfectly competitive market will expand output along its:
a. marginal cost curve. b. average total cost curve. c. average variable cost curve. d. market demand curve.
Labor productivity is defined as
a. the amount of output a typical worker turns out in an hour of work. b. the amount of output the best worker turns out in a day of work. c. the amount of output improvement in a year of work. d. the amount of average output improvement for a team in a year of work.
The nominal exchange rate is 90 Pakistani rupees per dollar. The price of a shirt in Pakistan is 1800 rupees. The same shirt sells for $25 in the U.S. A. What is the real exchange rate? Show your work. B. Can arbitragers make a profit? C. If your answer to C is yes, where would they buy and where would they sell?
Refer to the figure below, which shows three supply curves for corn. Which of the following would cause the supply of corn to shift from S1 to S2?
A. An increase in the price of fertilizer
B. A change in consumer tastes away from cornbread
C. A decrease in consumer incomes, assuming corn is a normal good
D. The development of a more effective insecticide against corn rootworm