When real GDP exceeds potential GDP, then the economy has
A) an inflationary gap.
B) a below-full-employment equilibrium.
C) a recessionary gap.
D) None of the above answers are correct.
A
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Which of the following might increase the supply curve of labor?
a. Elimination of discrimination against blacks. b. Elimination of discrimination against females. c. Easing licensing requirements. d. All of these.
When a consumer is purchasing the best combination of two goods, X and Y, subject to a budget constraint, we say that the consumer is at an optimal choice point. A graph of an optimal choice point shows that it occurs
a. along the highest indifference curve. b. along the lowest budget constraint. c. where the indifference curve is tangent to the budget constraint. d. All of the above are correct.
The relationship between tax rates and tax revenues is shown on the:
A. IRS curve. B. Laffer curve. C. production possibilities frontier. D. Discretionary Spending curve.
Refer to Figure 14.1. The income effect of the wage increase on the amount of hours of leisure is:
A) L0 to L2. B) L0 to L1. C) L1 to L2. D) L2 to L1. E) none of the above