To close an expansionary gap, the Fed ________ interest rates which ________ planned aggregate spending and ________ short-run equilibrium output.
A. raises; increases; increases
B. raises; decreases; decreases
C. raises; decreases; increases
D. reduces; increases; decreases
Answer: B
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A common property is
a. both nonrivalrous and nonexcludable. b. nonrivalrous, but not nonexcludable. c. nonexcludable, but not nonrivalrous. d. either nonrivalrous or nonexcludable, but not both.
Refer to Figure 5-1. Marginal social benefit is represented by which curve?
A) Supply B) D1 C) D2 D) All of the above represent marginal social benefit.
A major distinction to be made is that deficits count government spending shortfalls ___________, and public debt counts _______________.
A. in a year; the total amount owed from all years B. from all years; the total from a single year C. in real terms; in nominal terms D. as a percentage of GDP; in nominal terms
Monopolistic competition and perfect competition are different in that monopolistically competitive firms: a. cannot earn profits in the short run
b. face firm demand curves that are less elastic than perfectly competitive firms. c. face substantial barriers to entry. d. earn economic profits in the long run.