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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A deductible reduces ________ in exactly the same way as ________
A) moral hazard; coinsurance B) adverse selection; restrictive provisions C) moral hazard; cancellation of insurance D) adverse selection; limits on the amount of insurance
When neither player has a dominant strategy,
A) game theory will not provide information. B) no Nash-Equilibrium exists. C) at least one Nash-Equilibrium exists. D) the game cannot be analyzed.
Why would workers and retirees want to have their wages and benefits indexed to the Consumer Price Index (CPI)?
a. To lower their purchasing power during years of rising prices b. To maintain their purchasing power during years of rising output c. To maintain their purchasing power during years of declining output d. To increase their purchasing power during years of negative inflation e. To maintain their purchasing power during years of rising prices
Other things the same, if the expected return on U.S. assets increases, the
a. supply of dollars in the market for foreign-currency exchange shifts right. b. supply of dollars in the market for foreign-currency exchange shifts left. c. demand for dollars in the market for foreign-currency exchange shifts right d. demand for dollars in the market for foreign-currency exchange shifts left.