Refer to Figure 16-1. Suppose the economy is in a recession and expansionary fiscal policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) B to A. B) C to B. C) B to C. D) A to B. E) A to E.
D
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
The above figures show the market for gasoline. Which figure shows the effect of a nation-wide strike by municipal bus drivers, which causes more people to drive their cars to work?
A) Figure A B) Figure B C) Figure C D) Figure D
In the above figure, curve A is the ________ curve, curve B is the ________ curve, and curve C is the ________ curve
A) long-run aggregate supply; short-run aggregate supply; aggregate demand B) aggregate demand; short-run aggregate supply; long-run aggregate supply C) short-run aggregate supply; long-run aggregate supply; aggregate demand D) long-run aggregate supply; aggregate demand; short-run aggregate supply
Which of the following examples shows a shortage?
a. At $50 per watch, a company produces 10,000 watches and sells the same amount. b. At $50 per watch, a company produces 10,000 watches and has a demand for 100 more. c. At $50 per watch, a company produces 5,000 watches and sells 4,998. d. At $50 per watch, a company produces 5,000 watches and sells 1,000.