Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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Jerry's Jellybean Factory produces 2,000 pounds of jellybeans per month and sells them in a perfectly competitive market. The marginal cost is $3 per pound, the average variable cost is $2 per pound, and the beans sell for $4 per pound. Jerry
A) is maximizing profit. B) is incurring an economic loss and should shut down. C) could increase his profit by producing more beans. D) could increase his profit by producing fewer beans. E) could increase his profit by raising the price of his beans.
One of the problems in conducting a duration gap analysis is that the duration gap is calculated assuming that interest rates for all maturities are the same. That means that the yield curve is
A) flat. B) slightly upward sloping. C) steeply upward sloping. D) downward sloping.
Which of the following countries had an economic growth rate equal to zero between 1960 and 2004?
A) South Africa B) Philippines C) South Korea D) Kenya
In Figure 33.4, what is the burden of the tax on employers?
A. The wage increase of W5 - W2. B. The wage increase of W5 - W3. C. The wage increase of W5 - W1. D. The wage increase of W3 - W2.