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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An economist for a bicycle company predicts that, all else held constant, an increase in consumer incomes will increase the demand for bicycles. This prediction assumes that
A. there are many goods that are substitutes for bicycles. B. there are many goods that are complementary to bicycles. C. bicycles are a normal good. D. there are few goods that are substitutes for bicycles.
Before its IPO, Facebook was an example of a private firm. As a private firm, Facebook was
A) not subject to government regulations and taxation. B) not legally allowed to raise funds through venture capital firms. C) run by stockholders and a board of directors. D) run by its founder, Mark Zuckerberg.
"Second-hand" smoke is an often cited disadvantage of allowing smoking in restaurants. In economics, "second-hand" smoke is referred to as a(n)
A) capital good. B) externality. C) economic cost. D) negative investment.
Remittances can be used as investment capital for small businesses.
Answer the following statement true (T) or false (F)