The amount of additional aggregate demand needed to achieve full employment after allowing for price level changes is
A. The inflationary GDP gap.
B. The AD excess.
C. The recessionary GDP gap.
D. The AD shortfall.
Answer: D
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Refer to Figure 11-11. Constant returns to scale
A) occur between 10,000 and 20,000 pictures frames per month. B) occur for output rates greater than 5,000 picture frames. C) occur between 5,000 and 20,000 picture frames per month. D) will shift the long-run average cost curve downward.
If unemployment is the major problem in the economy, which of the following would be an appropriate monetary policy response?
a. decrease the required reserve ratio b. decrease the interest rate the Fed pays on bank reserves c. buy government bonds d. all of the above
In the short run when the marginal product of labor ________, the marginal cost of an additional unit of output ________.
A. rises; rises B. falls; falls C. falls; rises D. rises; doesn't change
If the dollar is overvalued against the peso, it implies that:
A) the exchange rate between the dollar and the peso is flexible. B) the quantity of dollar supplied in exchange of pesos equals the quantity of dollars demanded in exchange of pesos in the foreign exchange market. C) the quantity of dollar supplied in exchange of pesos exceeds the quantity of dollars demanded in exchange of pesos in the foreign exchange market. D) the quantity of dollar supplied in exchange of pesos is less than the quantity of dollars demanded in exchange of pesos in the foreign exchange market.