If output equals 50,000 and full employment real GDP equals 45,000, then this economy has a(n)
A. demand gap.
B. employment gap.
C. recessionary gap.
D. inflationary gap.
Answer: D
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Based on these graphs, in both cases _____.
a. RGDP increases
b. RGDP decreases
c. price level increases
d. price level decreases
The cross-price elasticity of demand between Coca-Cola and Pepsi-Cola is calculated by dividing
A) the percentage change in the price of Coca-Cola by the percentage change in the price of Pepsi-Cola. B) the percentage change in quantity demanded of Coca-Cola by the percentage change in the quantity demanded of Pepsi-Cola. C) the percentage change in the quantity demanded of Coca-Cola by the percentage change in the price of Pepsi-Cola. D) the percentage change in the price of Pepsi-Cola by the percentage change in quantity demanded of Coca-Cola.
The estimated regression equation is Y = 10 + 2.5X, if X =0 than the predicted value of Y is equal to:
A) 12.5 B) 10 C) 2.5 D) 7.5
According to Ricardian Equivalence, a tax cut will not have a material impact on consumption spending since ________
A) households will simply save the monies received from the tax cut B) the value of the tax multiplier is one C) a tax cut must lead to an increase in prices, which leaves the real value of consumption unchanged D) a decrease in taxes will be balanced, under current federal law, by a government spending increase