Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary
B. B; no output
C. B; expansionary
D. A; a recessionary
Answer: A
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The expected real cost of using a unit of capital over a given period of time is known as ________
A) the real rate of interest B) the nominal rate of interest C) depreciation D) the user cost of capital
Which of the following is an example of a negative externality?
A) There is an increase in injuries to pedestrians caused by accidents resulting from electronic billboards distracting drivers. B) The opening of a new shopping mall increases the business of nearby restaurants. C) A consumer pays a higher price than another consumer does for the same product. D) Consumers pay a sales tax in addition to the price of a product.
The higher the opportunity cost of making a new friend, the more likely one is to make a new friend, ?ceteris paribus?
Indicate whether the statement is true or false
If inflation in the United States is higher than in Japan, what will happen to the exchange rate between the U.S. dollar and the Japanese yen?
What will be an ideal response?