The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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What are the outcomes of the following games, assuming the max-min criteria is used?
What will be an ideal response?
If a perfectly competitive firm shuts down in the short run, its variable cost equals zero
a. True b. False
If a firm operates in a perfectly competitive market, then
A) all firms will advertise. B) no firms will advertise. C) the market leader will advertise. D) new firms will advertise.
Which statement is false?
A. The problems of the inner city ghettos were just as bad 50 years ago as they are today. B. There was a huge outward migration of middle- and working-class blacks from the ghettos in the 1970s and early 1980s. C. About 2 out of 5 poor blacks live in areas of extreme poverty. D. None of these statements are false.