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 Congressional Budget Office estimates that the additional taxes and fees enacted under the ACA will not even cover half of the true cost of the ACA
Indicate whether the statement is true or false
In the four-quadrant diagram of the specific factors model, the graph in the upper left quadrant is a country's
A) production function for food. B) production possibility frontier. C) labor allocation constraint. D) production function for cloth. E) labor supply curve.
When demand is perfectly inelastic with respect to price, the demand curve is horizontal
Indicate whether the statement is true or false
Price controls may be thought of as
A) a restraint on the rationing function of prices. B) useful tools that promote production. C) necessary in market economies. D) the freeing-up of free market forces.