Based on the figure below. Starting from long-run equilibrium at point C, a favorable inflation shock that decreases inflation from ? to ?1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. A; a recessionary
B. B; recessionary
C. B; expansionary
D. A; an expansionary
Answer: D
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Refer to Figure 12-6. Which of the following statements is true?
A) Jason should produce where MC equals $3 (point d) where he will minimize his losses. B) Jason cannot earn a profit from selling any number of apples. C) Jason should produce where MC equals $3 (point d) where he will maximize his profit. D) Jason should produce where the distance between MC and his demand curve is greatest (point b).
Which of the following changes shifts the SRAS curve up?
A) An increase in the labor force B) An increase in firms' costs C) A decrease in government purchases D) An increase in the money supply
Special-interest legislation that imposes costs broadly over many taxpayers can be enacted because
a. taxpayers benefit from this type of legislation b. taxpayers remain rationally ignorant of the legislation c. only the wealthy pay these taxes d. these taxes are actually borne by a minority of taxpayers e. the Constitution requires special-interest legislation
In a closed economy, national saving is
a. usually greater than investment. b. equal to investment. c. usually less than investment because of the leakage of taxes. d. always less than investment.