The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A
B. recessionary; C
C. recessionary; B
D. expansionary; A
Answer: D
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Assume that you assign the following subjective probabilities for your final grade in your econometrics course (the standard GPA scale of 4 = A to 0 = F applies): Grade Probability A 0.20 B 0.50 C 0.20 D 0.08 F 0.02 The expected value is:
A) 3.0 B) 3.5 C) 2.78 D) 3.25
The labor supply curve is typically upward sloping because as the wage rate rises,
a. it will exceed the reservation wages of more individuals b. the opportunity cost of leisure falls c. the demand for the good produced by labor increases d. the marginal revenue product of labor falls e. the marginal revenue product of labor rises
To the extent that unions can transfer profits from unionized employers to union workers, they will
a. reduce the incentive of unionized employers to invest in fixed capital and research. b. increase employment in the unionized sector. c. reduce the incentive of nonunion firms to invest and expand their output. d. increase the productivity of labor in the long run.
Expenditures on a nation's domestic production
a. are less than its domestic production. b. are equal to its domestic production. c. are greater than its domestic production. d. could be less than, equal to, or greater than its domestic production.