The deficit that exists when the economy operates at full employment is called the __________ deficit
A) net
B) gross
C) cyclical
D) structural
D
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Velocity can be calculated as the ratio of the value of transactions to
a. the price level. b. level of real GDP. c. the money stock. d. the inflation rate.
Leveraging can encourage herding behavior.
Answer the following statement true (T) or false (F)
To encourage economic development a country should do all of the following EXCEPT
A. allow creative destruction to run its course. B. limit the amount of imports allowed into the country. C. establish a system of property rights. D. invest in human capital.