Suppose the economy is initially experiencing a recessionary gap. A reduction in the size of the budget deficit will cause which of the following in the short run?
A) a reduction in the size of the recessionary gap and increase in real GDP.
B) an increase in the size of the recessionary gap and decrease in real GDP.
C) an increase in inflation and increase in aggregate supply.
D) an inflationary gap.
B
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If a firm finds that increases in output lead to increases in long-run average total cost, then it must be experiencing _________ which could be caused by ___________
Fill in the blank(s) with the appropriate word(s).
Even though the catalogs listed in the Application were reissued every six months, the prices which were tracked in these retail catalogs
A) were not listed due to low rates of inflation. B) changed every month. C) tended to fall during periods of high inflation. D) were typically fixed for a year or more.