A recessionary gap exists when AD and SRAS
A) fail to intersect.
B) intersect to the right of Natural Real GDP.
C) intersect to the left of Natural Real GDP.
D) both have a positive slope.
C
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The long-run aggregate supply curve assumes that
A) the unemployment rate is more than 9 percent. B) there is no government purchasing of goods and services. C) only laborers are fully employed. D) all factors of production are fully employed.
The law of demand can be explained as
A) legal reasons people make purchases in the marketplace. B) people are willing to make limited sacrifices to acquire products. C) a lot of people wanting the same thing. D) the higher the price, the smaller the quantity demanded, ceteris paribus.
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
The less elastic is the demand for a firm's product, the greater is that firm's market power
Indicate whether the statement is true or false