When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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Consider the figure? 4B-2. If the price is? $20, find the area that represents producer surplus.
A. Upper A plus Upper B. B. Upper C plus Upper D. C. Upper A plus Upper B plus Upper C. D. Upper F plus Upper E plus Upper D.
A firm's demand for labor is known as a "derived demand" because
a. the firm gains utility from hiring more labor. b. the amount of labor hired depends upon how much output the firm can sell. c. the wage rate paid to workers is derived from the market for labor. d. it is derived from the demand for capital.
A likely example of complementary goods for most people would be
a. canoes and paddles. b. snow mobiles and sofas. c. coffee and tea. d. tennis balls and basketballs.
In the figure above, what is the point price elasticity of demand when price is $60?
A. -0.50 B. -2.00 C. -1.00 D. -0.75 E. -1.60