If the economy is represented in the graph shown and is currently at point E1, then the economy must be in:
A. long-run equilibrium.
B. an economic boom.
C. an economic recovery.
D. a recession.
Answer: A
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Net taxes:
What will be an ideal response?
Which of the following fiscal policies cause a decrease in aggregate expenditures?
A. An increase in taxes and a decrease in government spending. B. An increase in transfer payments and an increase in government spending. C. An increase in transfer payments and a decrease in taxes. D. A decrease in taxes and an increase in government spending.
Economic growth may face environmental limits because:
A. the market mechanism mobilizes resources to deal with shortages. B. economic growth may lead to less, not more, pollution. C. global environmental problems are not handled by markets or national governments. D. economic growth can take the form of new, different, and "cleaner" goods and services.
In Heckscher-Ohlin (H-O) theory, differences in ________ across countries are considered to be the basis for comparative advantage.
A. factor endowments B. production technologies C. economic freedom D. consumer tastes and preferences