A recessionary gap exists when potential GDP
A. falls short of equilibrium GDP.
B. exceeds equilibrium GDP.
C. equals equilibrium GDP.
D. inflation leads to economic disequilibrium.
Answer: B
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From 2002 to 2014, employment a. declined in health care and food services
b. declined in health care and increased in food services. c. declined in food services and increased in health care. d. increased in health care and food services.
Refer to the accompanying figure. This economy would be operating at point B if:
A. resources that are better-suited to making movies were being used to make milk, while resources that are better-suited to making milk were being used to make movies. B. it was operating efficiently. C. the opportunity cost of making milk were higher than the opportunity cost of making movies. D. the opportunity cost of making movies were higher than the opportunity cost of making milk.
Suppose that a typical basket of goods costs 400 pesos in Mexico and 25 pounds in Britain: the market exchange rate is 25 pesos per pound. Using purchasing power parity, the appropriate exchange rate for comparing the incomes of the two countries is:
A. 10 pesos per pound. B. 0.25 pesos per pound. C. 16 pesos per pound. D. 25 pesos per pound.
What 3 macroaggregates that economists use to assess the health of an economy?
What will be an ideal response?