Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Suppose a country's net exports equal -$2.1 billion. Which of the following will happen if the volume of exports increases by $3 billion without any change in the volume of imports?
A) The country's net exports will stand at -$5.1 billion. B) The country's net exports will stand at zero. C) The country's net exports will stand at -$0.9 billion. D) The country's net exports will become positive.
In the above figure, the distance between points T and U represents
A) an expansion. B) a trough. C) a peak. D) a recession.
To answer the question, refer to the following table showing a demand schedule: 
If price falls from $200 to $150, what is the elasticity of demand over this range?
A. -2.5 B. -3.0 C. -1.0 D. -0.62 E. -1.17
On the demand curve shown in the graph above, label it where it is very elastic, unit elastic, and very inelastic.
