Refer to the above figure. Suppose the economy is operating at point A. There is a recessionary gap of ________, which can be closed by ________.
A. $2 trillion; expansionary fiscal policy that generates another $2 trillion in total spending
B. $3 trillion; increasing government spending by $1 trillion
C. $2 trillion; an increase in government spending of $14 trillion
D. $1 trillion; expansionary fiscal policy that shifts the short-run aggregate supply curve through point C
Answer: A
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Private goods ____ rival ____ excludable
a. Are, and are b. Are, but are not c. Are not, but are d. Are not, and are not
If consumption expenditures are $200 billion, total investment is $50 billion, government purchases are $40 billion, exports are $45 billion, imports are $40 billion, aggregate expenditures must be:
A. $275 billion. B. $295 billion. C. $320 billion. D. $395 billion.
Perfectly competitive firms always produce the quantity that minimizes average total cost in the short run.
Answer the following statement true (T) or false (F)
Refer to Exhibit 2-2. If PPF2 is the relevant production possibilities frontier, a significant loss of the quantity of resources available could
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