The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A
B. recessionary; C
C. recessionary; B
D. expansionary; A
Answer: D
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Refer to Table 10-4. For steak and cheese sandwiches and grilled chicken sandwiches, the table contains the values of the marginal utility (MU) and marginal utility per dollar (MU/P) for Mabel Jarvis
Mabel has $14 to spend on steak and cheese sandwiches and grilled chicken sandwiches. Which of the following statements is true? A) To maximize her utility, Mabel will need a total of $36, the income needed to buy 6 steak and cheese sandwiches and 6 grilled chicken sandwiches. B) If Mabel maximizes her utility she will buy three steak and cheese sandwiches and two grilled chicken sandwiches. C) If Mabel was maximizing her utility when spending $14 and then received an additional $4, she would receive the most marginal utility per dollar if her next purchase was another grilled chicken sandwich. D) Mabel will first buy two steak and cheese sandwiches; then with her remaining $6 she will buy three grilled chicken sandwiches.
If real income increases,
a. there will be a rightward movement along a stationary money demand curve b. there will be a leftward movement along a stationary money demand curve c. the demand for money curve will shift rightward d. the demand for money curve will shift leftward e. there will be no movement of the demand curve for money and no movement along it
The federal funds rate is the interest rate:
a. The Federal Reserve changes banks that borrow from it. b. U.S. financial institutions charge their best customers. c. On U.S. interbank loans. d. Central banks charge individuals. e. U.S. financial institutions pay to their best (i.e., largest) depositors.
For firms that sell one product in a perfectly competitive market, the market price:
A. is equal to the average total cost of a firm. B. is equal to the marginal cost of a firm. C. will remain constant regardless of an individual firm's output decision. D. All of these are true.