The aggregate demand-aggregate supply model shows that closing an expansionary gap involves deflation and closing a recessionary gap involves inflation.
a. true
b. false
a. true
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Which of the following situations best describes an individual who is cyclically unemployed?
A) Catherine is a ski instructor who is not working because it is summer. B) Matthew was an artillery man, but he has been unable to find work since he left the army. C) Nicholas was laid-off when orders for General Motors cars fell during a recession. D) Susan quit her job as a preschool teacher to try to find a better paying job.
Explain why a merchandise trade deficit created by imports of consumer goods is more troublesome than a merchandise trade deficit created by imports of capital goods
If a nation has a comparative advantage in the production of good X, this means that the nation
A. cannot benefit by producing and trading this product. B. gives up less of alternative goods than other nations in producing a unit of X. C. has a production possibilities curve identical to those of other nations. D. is not subject to opportunity costs in producing good X.
Figure 9.5Figure 9.5 shows the short-run and long-run effects of an increase in demand of an industry. The industry is:
A. a constant-cost industry. B. an increasing-cost industry. C. a decreasing-cost industry. D. There isn't sufficient information.