Which of the following statements about the GDP gap is not true?
a. It widens during recessions and narrows down during expansions.
b. When an economy's GDP gap equals zero, it operates on its production possibilities curve.
c. It is a measure of output lost as a result of unemployment.
d. There are more goods and services available in an economy as its GDP gap widens.
e. It is equal to potential real GDP minus actual real GDP.
d
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The long run is defined as
A) any time after six months. B) any time after one year. C) the period of time when all resources are fixed. D) the period of time when most (more than 50 percent) resources are variable. E) the period of time when all resources are variable.
In the labor market, adjustments to changes in supply and demand
A. do not apply, since the labor market does not respond to supply and demand forces. B. do not apply, since wages in the labor market always go up. C. usually take time to occur. D. usually occur instantly.
John Maynard Keynes stated that “In the long run we are all dead!” Explain what he meant by this.
What will be an ideal response?
Using the average price and average quantity, what is the elasticity of demand for oranges when the price of oranges changes from $200 to $160 per bushel and so the quantity demanded changes from 1000 to 1400 bushels?
A) 1.5 B) 0.1 C) 10.0 D) 0.67