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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The extra pay people earn in exchange for undertaking risky or otherwise undesirable work is called
A) a compensating differential. B) arbitrage income. C) overtime pay. D) a fringe benefit.
Jane's Copy Services is in perfect competition. Jane currently charges 10 cents per page, which is the going market price
Jane thinks that she can increase her profit if she lowers her price to 8 cents per page to increase the demand for her service. Is Jane right? Why or why not?
The oversimplified formula for the multiplier yields a number that is too large due to the exclusion of
a. variable imports. b. changes in the price-level. c. income taxes. d. All of the above.
Althea, a brilliant new Ph.D. in economics, has turned down many job offers because she hopes eventually to teach at one of the top 10 universities in her field. The type of unemployment she is experiencing is:
A. frictional. B. structural. C. underemployment. D. cyclical.