A recessionary gap develops:
a. when actual output exceeds potential output
b. when resource prices are "sticky" upward.
c. only when the economy is in recession.
d. only when GDP grows by more than 4 percent.
e. only when unemployment exceeds its natural rate.
e
You might also like to view...
Evaluate the following statement. The Cournot model basically assumes that the sole decision of each firm in a duopoly is one of determining how much to produce not which price to set
What will be an ideal response?
Beginning from a position of long-run equilibrium at the full-employment level of real GDP, the economy's short-run response to an increase in the aggregate demand curve would be:
a. a movement upward along the short-run aggregate supply curve. b. a movement upward along the long-run aggregate supply curve c. a downward shift in the short-run aggregate supply curve. d. a shift in both the aggregate demand curve and the short-run aggregate supply curve with a movement along the long-run aggregate supply curve. e. no change, since the economy is already in equilibrium.
At what stage of the securitization process was moral hazard a major problem?
a. Mortgage origination. b.Due diligence and mortgage servicing. c. Rating securitized issues. d. All of the above
Suppose that when the price of wheat is $2 per bushel, farmers can sell 10 million bushels. When the price of wheat is $3 per bushel, farmers can sell 8 million bushels. Which of the following statements is true? The demand for wheat is
a. income inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. b. income elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. c. price inelastic, so an increase in the price of wheat will increase the total revenue of wheat farmers. d. price elastic, so an increase in the price of wheat will increase the total revenue of wheat farmers.