Refer to the diagram. Assume that G and T 2 are the relevant curves, the economy is currently at A, and the full-employment GDP is B. This economy has a(n):
A. cyclically adjusted budget surplus.
B. actual budget deficit.
C. cyclically adjusted budget deficit.
D. actual budget surplus.
B. actual budget deficit.
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If the real interest rate is 5 percent and the nominal interest rate is 2 percent, this implies an expected inflation rate of
A) -7 percent. B) -3 percent. C) 3.5 percent. D) 7 percent.
If the price level falls but people don't feel richer because of that fall, then the AD curve would likely:
A. shift in. B. be flatter than it otherwise would be. C. be steeper than it otherwise would be. D. shift out.
In 2001 the U.S. Congress did all of the following except
A. Reduce acreage set-asides. B. Increase loan deficiency payments. C. Increase existing subsidies paid to farmers. D. Create new subsidy programs.
In long-run equilibrium for a monopolistically competitive firm, economic profit equals zero and thus the outcome is efficient.
Answer the following statement true (T) or false (F)