Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C
B. B; C
C. B; A
D. D; B
Answer: D
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In 2012, the combined expenditures of federal, state, and local governments in the United States were approximately
a. 9 percent of GDP. b. 24 percent of GDP. c. 38 percent of GDP. d. 45 percent of GDP.
The New York Stock Exchange (NYSE) originated as:
A. a decentralized electronic market made up of dealers all over the world. B. a financial market where nearly 100 million shares of stock are traded every business day. C. the only centralized stock exchange in the world. D. an example of a centralized exchange.
According to Ricardian equivalence advocates, if the government announces a plan to balance the budget by reducing its deficits to zero, then the private sector will:
A. decrease consumption. B. decrease investment. C. increase savings. D. decrease savings.
When output rises, AFC
A. must be rising. B. must be falling. C. may be falling or rising. D. will remain constant.