Refer to Figure 16-1. Suppose the economy is in short-run equilibrium above potential GDP and no policy is pursued. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) C to B. B) A to E. C) D to C. D) C to D. E) E to A.
D
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An increase in the demand for labor means that
A) the demand for labor increases as a result of an increase in the real wage rate. B) the demand for labor increases at any real wage rate. C) the supply of labor must also be increasing. D) the demand for labor increases as a result of a decrease in the real wage rate.
The vertical distance between the total variable cost curve and the total cost curve ________ as output increases; the vertical distance between the average variable cost curve and the average total cost curve ________ as output increases
A) decreases; remains the same B) is constant; becomes smaller C) increases; becomes smaller at first but then increases D) increases; remains the same
All taxes distort market decisions, affecting the buying and selling of goods and services
a. True b. False Indicate whether the statement is true or false
Which of the following is true of a current account surplus? a. A country that is running a current account surplus will have negative net exports
b. A current account surplus is consistent with domestic spending being in excess of domestic production. c. A current account surplus means that a country is also running a net surplus in its financial account. d. A country can have a current account surplus only if it exports more services as compared to goods. e. A country that is running a current account surplus buys more bonds from the rest of the world as compared to what it sells.