The amount by which actual output falls short of potential output is called:
a. a deadweight loss
b. real GDP.
c. a recessionary gap.
d. the full-employment output.
e. an expansionary gap.
c
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Proprietor's income is not considered part of national income
Indicate whether the statement is true or false
If a principal and agent have an efficient contract, then
A) one of them must be more risk-averse than the other. B) neither can be made better off without harming the other. C) they must have symmetric information. D) the principal bears more of the risk.
A decrease in expected inflation for any given nominal interest rate will cause:
A. bond prices to decrease and interest rates to increase. B. the bond supply curve to shift to the left. C. the bond demand curve to shift to the left. D. bond prices to increase and interest rates to decrease.
Why are diamonds more expensive than water?
A) because the last glass of water has higher marginal utility than the last diamond B) because the last diamond has higher marginal utility than the last glass of water C) because you get more total utility from diamonds D) because water is a necessity