If the economy has a recessionary expenditure gap of $15 billion and the MPS is 0.3, then the equilibrium level of GDP is:
A. $16 billion below the full-employment level
B. $21 billion below the full-employment level
C. $50 billion below the full-employment level
D. $50 billion above the full-employment level
C. $50 billion below the full-employment level
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A recession in the rest of the world means U.S
A) exports increase. B) aggregate demand decreases. C) potential GDP decreases. D) potential GDP increases. E) aggregate supply decreases.
All of the following are characteristics of an oligopolistic market EXCEPT
A) firms must consider the actions of their rivals. B) cartels eventually form to keep prices high. C) firms have the ability to influence prices. D) firms earn lower profits than a monopoly.
Which of the following, other things the same, would make the price level decrease and real GDP increase?
a. long-run aggregate supply shifts right b. long-run aggregate supply shifts left c. aggregate demand shifts right d. aggregate demand shifts left
When a nation has a comparative advantage in the production of a particular good
A) the nation tends to avoid specialization. B) the comparative advantage encourages self-sufficiency. C) the opportunity cost of producing that good is higher than that of other goods. D) the nation can gain from trade.