If the economy is in an inflationary gap, actual income is
A. to the right of LRAS
B. to the left of LRAS
C. on LRAS
D. above LRAS
Answer: A. to the right of LRAS
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In a free market for rental housing, the average rental rate
A. includes a large amount of economic rent. B. includes zero economic rent. C. is entirely economic rent, since rental housing is fixed in supply. D. includes some economic rent.
Can the U.S. federal government go broke as a result of a large national debt?
What will be an ideal response?
A point on a nation's production possibilities curve represents
A. An undesirable combination of goods and services. B. Combinations of production that are unattainable, given current technology and resources. C. The full employment of resources to achieve a particular combination of goods and services. D. Levels of production that will cause both unemployment and inflation.
The inside lags for monetary policy are relatively long compared to those for fiscal policy.
Answer the following statement true (T) or false (F)