Suppose equilibrium for an economy occurs when C + I + G + X = $14 trillion. If the real Gross Domestic Product (GDP) is $13 trillion, then unplanned inventories are
A) increasing, and real Gross Domestic Product (GDP) will contract.
B) increasing, and real Gross Domestic Product (GDP) will expand.
C) decreasing, and real Gross Domestic Product (GDP) will expand.
D) decreasing, and real Gross Domestic Product (GDP) will contract.
C
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Which of the following will NOT shift the short-run aggregate supply function?
A) changes in labor costs B) changes in the costs of nonlabor inputs C) changes in the price level D) changes in the expected price level
A binding price floor is presented graphically as a(n):
a. price at equilibrium. b. price below equilibrium. c. price above equilibrium. d. inefficiently high quality of the good provided
An industry which has a 4-firm concentration ratio near 0 would best be described as
A. oligopoly. B. monopoly. C. perfect competition. D. monopolistic competition.