Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower
Answer: C
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Using the information in the table above, calculate the number of people in the labor force
A) 2500 B) 2100 C) 1500 D) 800
Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of
A) moral hazard. B) adverse selection. C) asymmetric information. D) the free-rider problem.
What is an opportunity cost?
What will be an ideal response?
The convergence theory suggests:
A. that poorer countries will grow faster than rich ones. B. all countries eventually will experience the same rate of growth. C. countries may have the same rate of growth but differing levels of income. D. All of these are true.