When actual output is less than potential output, there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; decrease
B. a recessionary; increase
C. an expansionary; increase
D. a recessionary; decrease
Answer: D
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Liabilities of the commercial banking system include
A. reserves and loans. B. reserves and deposits. C. loans and deposits. D. deposits.
A firm that uses price discrimination to enhance its net revenues will
a. expand output as long as price exceeds average total costs. b. expand output as long as average total costs are declining. c. charge a higher price to consumers with a more elastic demand for the firm's product. d. charge a lower price to consumers with a more elastic demand for the firm's product.
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
In 2008 as the recession worsened, suppose discouraged workers were included as part of the unemployment rate. Which of the following would have occurred?
A) The unemployment rate would have increased. B) The unemployment rate would have decreased. C) The labor force participation rate would not have changed. D) The unemployment rate would not have changed. E) The labor force participation rate would have decreased.