The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B
B. recessionary; C
C. recessionary; A
D. expansionary; A
Answer: C
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List four characteristics of monopolistic competition
What will be an ideal response?
Suppose you want to get to Orlando, Florida, for the week-long spring break. You can get there in two and one-half days by bus, and back in another two and one-half days. This will cost you $20 round-trip. You can fly there and back in four hours each way. This will cost $200 . Which of the following is not true?
a. It may be economically rational for you to go by plane rather than by bus. b. Depending on what else you can do that week, it may be economically rational for you to not go at all rather than to go by bus. c. The true cost of going to Orlando is either the time or the money you spend traveling, whichever it is you value more. d. The more you'd enjoy Orlando, the more economically rational it becomes for you to fly there instead of taking the bus. e. It is possible that it is rational for you to fly and rational for others to take the bus.
If the variable on the vertical axis increases by 24 and the variable on the horizontal axis decreases by 3, the slope of the line is:
A. -24. B. -8. C. 3. D. 72.
Arbitrage ensures that the spot exchange-rate value of a currency will equal the forward exchange-rate value of the currency.
Answer the following statement true (T) or false (F)