An economy that is operating below its full-employment capacity is experiencing:
A. Say's Law.
B. a recessionary gap.
C. Keynesian aggregate demand.
D. an inflationary gap.
Answer: B
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The quantity of goods exchanged in a market will be below the equilibrium quantity
A. when the price is either held above or below the equilibrium price. B. only when the price is held above the equilibrium price. C. only when the price is held below the equilibrium price. D. only when the price is rising.
As a country that has a bowed-out production possibilities frontier produces more of one good, the opportunity cost of a unit of that good ________
A) might increase or decrease B) remains the same C) increases D) decreases
Which of the following is a characteristic of monopolies?
a. Producing less at a higher average cost b. Producing more at a lower average cost c. Eliminating price discrimination d. Strengthening market forces
Why is the money multiplier considered to be a potential multiplier rather than an indication of exactly how much multiplication should be expected?