If the expenditure schedule must be shifted upward to reach potential GDP, then the economy is experiencing a(n)
A. inflationary gap.
B. precautionary gap.
C. recessionary gap.
D. expansionary gap.
Answer: C
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When consumers do not view similar products as perfect substitutes, those products are called:
A. homogenous. B. complements. C. differentiated. D. normal.
The consumer price index (CPI) is a number that measures movements in the average (general) level of prices
a. True b. False Indicate whether the statement is true or false
Suppose an entrepreneur commits to a production schedule but overestimates the market price for her products. Which situation is not possible?
a. Price equals average total cost. b. Losses are greater than if she shut down. c. Total profit is positive. d. Average variable cost is greater than marginal cost. e. Total profit is zero.
Which of the following expenditures would not be included in GDP?
a. All of these choices would be counted in GDP. b. Purchase of a new lawnmower. c. Purchase of a silver cup previously sold new in 1950. d. Purchase of a ticket to the latest movie.