Which of these is NOT a potential source of inefficiency?
A) external benefits
B) increasing marginal costs
C) monopoly
D) subsidies
B
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
A firm will only earn normal profit in the long run
a. if firms can freely enter or leave the market b. if firms do not try to maximize profit c. only if the industry is perfectly competitive d. whenever products are not differentiated e. if barriers to entry exist
The current account shows international transactions in goods and services, the capital account shows international transactions involving the flow of financial assets, and the official reserve transactions account shows movement of international reserves
a. True b. False
Answer the following statements true (T) or false (F)
1. U.S. gross domestic product (GDP) measures the market value of all goods and services produced by Americans in one year. 2. A product that was produced in 2013 and not sold until 2014 is counted as part of GDP in 2013. 3. The value added in an industry includes the wages earned by workers in the industry. 4. Personal consumption expenditures include expenditures for new houses. 5. The value of a sale of a share of stock is considered to be an investment in national income accounting.