An expansionary gap is closed in the long run by a(n):
a. rightward shift of the short-run aggregate supply curve
b. leftward shift of the short-run aggregate supply curve.
c. movement to the right along a fixed short-run aggregate supply curve.
d. increase in aggregate demand.
e. decrease in aggregate demand.
b
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The rationality assumption states that
A) all actions taken by consumers are based on what is good for society. B) people make decisions regardless of how the outcome will affect them. C) people make decisions to buy only those goods that they need rather than goods that they want. D) people do not intentionally make decisions that would leave them worse off.
The required reserve ratio is the
A) amount of excess reserves the bank holds just in case. B) total amount of reserves the bank holds in its vaults. C) total amount of reserves the bank holds at the Fed. D) amount of reserves banks are required by the Fed to be held as a percentage of the bank's deposits. E) amount of reserves banks are required by the Fed to be held as a percentage of the bank's loans.
In which of the following cases does the benefit principle provide little guidance?
a. The benefits of the program are spread throughout the population. b. Gasoline taxes are used to fund highways. c. It is difficult to identify the beneficiaries of government programs. d. In cases a and c. e. In none of the above cases.
A manufacturer that is trying to avoid the "double marginalization problem" can do so by encouraging competition rather than protecting retailers through exclusive territories, and controlling final product price through resale price maintenance
contracts. Indicate whether the statement is true or false