The country of Glassen has experienced an expansionary gap for the last three years. The advocates of passive policy are likely to suggest a policy which causes _____.
a. the short-run aggregate supply to shift to the left

The income earned by entrepreneurs is

A) profit or loss. B) wages. C) interest. D) rent, wages, and interest. E) a mixture of rent, wages, interest, and profit.

Profits resulting from luck can be distinguished from profits attributable to shrewd predictions by

A) calculating the opportunity cost of earning the profits. B) comparing the profits with interest rates. C) finding out whether they lead to reduced revenue or increased costs. D) no known empirical test. E) whether or not they were generally anticipated.