An inflationary gap means that the level of real GDP at the short-run macroeconomic equilibrium
A) is less than full-employment GDP.
B) equals full-employment GDP.
C) is more than full-employment GDP.
D) may be less than, more than, or the same as full-employment GDP depending on the level of potential GDP.
C
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The marginal social cost (MSC) function is the sum of the following:
a. market-level marginal abatement cost (MACmkt) + marginal cost of enforcement (MCE) b. marginal abatement cost (MAC) + marginal external cost (MEC) c. marginal abatement cost (MAC) + total social cost (TSC) d. market-level marginal abatement cost (MACmkt) + marginal external cost (MEC)
If a subsidy is provided to produce good X, this will shift the
A. demand curve for X to the right. B. supply curve for X to the left. C. demand curve for X to the left. D. supply curve for X to the right.
The moral hazard that can result from debt financing is mainly due to the:
A. borrower wanting to refinance the loan. B. economy turning sour and the borrower defaulting. C. borrower taking greater risk in hopes of obtaining a larger return. D. borrower not working as hard once he or she obtains the loan.
All capitalist economies
A. can operate without government establishing a legal system. B. create an equal distribution of income. C. depend on central planning. D. depend on the price mechanism.