In the non-market-clearing model, "involuntary" unemployment results because
A) real wages are too high.
B) real wages rise when aggregate demand increases.
C) real wages fall when aggregate demand increases.
D) wages and prices are sticky.
D
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Based on the figure below. Starting from long-run equilibrium at point C, an increase in government spending that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. D; an expansionary B. B; no output C. B; expansionary D. A; a recessionary
In the figure above, the substitution effect outweighs the income effect in all segments EXCEPT
A) 0a. B) 0c. C) bc. D) cd.
The more limited information, the _____ the new classical AS curve
a. flatter. b. steeper. c. horizontal. d. downward sloping. e. none of the above.
In the aggregate demand–aggregate supply model, which of these changes is most likely when the cost of production increases in the long run? a. A leftward shift of the short-run aggregate supply curve b. A leftward shift of the short-run aggregate demand curve c. A rightward shift of the short-run aggregate supply curve d. An increase in the potential output level increases
e. A decrease in the actual price level decreases.