If the economy is in equilibrium with real GDP less than potential GDP, there is ________ gap, and a fiscal policy that ________ is appropriate
A) a recessionary; decreases aggregate demand
B) an inflationary; increases aggregate demand
C) a recessionary; increases aggregate demand
D) an inflationary; decreases aggregate demand
E) a recessionary; increases potential GDP
C
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At the equilibrium rate of interest:
A) the quantity of credit demanded falls short of the quantity of credit supplied. B) the quantity of credit demanded equals the quantity of credit supplied. C) the quantity of credit demanded is zero. D) the quantity of credit supplied is zero.
The government imposes a sales tax on hot dogs. The tax would be paid entirely by the hot dog buyers if the
A) supply is perfectly elastic. B) supply is perfectly inelastic. C) demand is perfectly elastic. D) None of the above answers is correct.
If Slovenia is a large country in world trade, then if it imposes a large set of tariffs on many of its imports, this would
A) improve its terms of trade. B) have no effect on its terms of trade. C) harm its terms of trade. D) decrease its marginal propensity to consume. E) increase its exports.
Higher education is a ________ and assigned textbooks are ________.
A. need; wants B. want; wants C. need; needs D. want; needs