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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a. factors of production. b. output. c. inputs. d. resources.
The Fed's two main monetary policy targets are
A) the money supply and the inflation rate. B) the money supply and the interest rate. C) the interest rate and real GDP. D) the inflation rate and real GDP.
In a put options contract, the
A) seller has the obligation to receive the instrument at a specified time. B) buyer has the obligation to deliver the instrument at a specified time. C) buyer has the obligation to receive the instrument at a specified time. D) seller has the obligation to deliver the instrument at a specified time.
In an unfunded pension system where current contributions are paid out to current beneficiaries, the total amount of funds available to invest _____ and the interest rate _____
a. falls; falls b. rises; rises c. falls; rises d. rises; falls