When actual output exceeds potential output there is ________ output gap and the rate of inflation will tend to ________.
A. no; remain the same
B. an expansionary; decrease
C. an expansionary; increase
D. a recessionary; increase
Answer: C
You might also like to view...
In 2-input production models, constant returns to scale implies horizontal marginal cost curves.
Answer the following statement true (T) or false (F)
Marginal cost is
a. the increase in total cost from producing one more unit of output b. total variable cost per unit of output c. fixed cost per marginal unit d. average total cost divided by the quantity of inputs used e. total cost per unit of output
Models are simplifications that are used to observe the workings of a system.
Answer the following statement true (T) or false (F)
Answer the following statement(s) true (T) or false (F)
1. An increase in the number of sellers leads to a decrease in supply. 2. Changes to the market price can bring supply and demand together. 3. At the equilibrium quantity, the quantity demanded equals the quantity supplied. 4. At $3 per pound, the quantity of oranges demanded is 2,000 pounds and the quantity supplied is 4,000 pounds. As a result, there is a shortage at this price.