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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_________________—a term referring to the percentage change in the quantity of savings divided by the percentage change in interest rates.
a. Cross-price elasticity of demand b. Income elasticity of demand c. Elasticity of savings d. Wage elasticity of labor supply
If the nominal interest rate is 6 percent and the rate of inflation is 10 percent, then the real interest rate is
a. -16 percent. b. -4 percent. c. 4 percent. d. 16 percent.
When a country imposes a per-unit (ad-valorem) tariff on an imported good or service then, the price that domestic consumers pay for the import falls
Indicate whether the statement is true or false
The essential functions of any central bank are:
A. preventing the formulation of monopolies or other market failure, and acting as a lender of last resort. B. managing the money supply, and acting as a lender of last resort. C. overseeing major business transactions, and managing the money supply. D. collecting taxes, and managing the supply of money.