Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output
B. D; an expansionary
C. B; recessionary
D. D; a recessionary
Answer: D
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Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
Assuming all else equal, if the labor demand curve shifts to the left and the labor supply curve remains unchanged, ________
A) equilibrium wage falls B) consumption falls C) unemployment rises D) equilibrium wage rises
In 2008, Germany had a budget deficit of 37 billion euros. This will budget deficit ________ the supply of loanable funds and ________ the real interest rate
A) increased; lowered B) decreased; raised C) decreased; lowered D) increased; raised
Sergei makes millions of dollars a year playing hockey. Sergei is also the best tailor in his hometown in Russia. Why is Sergei unlikely to make his own clothes? a. He has already made all the clothes he will need for a few years
b. The opportunity cost to him of making his own clothes is very high because it takes away from his lucrative hockey career. c. Sergei just can't find the material he likes in the United States. d. Sergei has a comparative advantage in tailoring clothes.