Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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If Monica has a comparative advantage in baking and George has a comparative advantage in sewing, then
a. Monica must have an absolute advantage in baking b. Monica must have an absolute advantage in sewing c. George must have an absolute advantage in baking d. George must have an absolute advantage in sewing e. we can conclude nothing about absolute advantage
How do balance of trade, balance on current account, and balance of payments differ?
What will be an ideal response?
The U.S. national debt at the end of fiscal year 2014 was almost
a. $13.5 trillion. b. $9.0 trillion. c. $18 trillion. d. $1.3 trillion.
Government debt held by citizens of a country is:
A. more like an individual's debt because paying interest on it involves no net reduction in domestic income. B. more like an individual's debt because paying interest on it involves a net reduction in domestic income. C. less like an individual's debt because paying interest on it involves no net reduction in domestic income. D. less like an individual's debt because paying interest on it involves a net reduction in domestic income.