In Figure 9.9, at a full-employment output level of $150 billion, the gap by which actual aggregate income or GDP is different from full-employment income or GDP is
A. An inflationary gap of $25 billion income.
B. An inflationary gap of $50 billion income.
C. A recessionary gap of $50 billion income.
D. Expenditure equilibrium.
Answer: C
Economics
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a. $500 b. more than $10 but less than $500 c. $10 d. less than $10 e. zero
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An outward bowed production possibilities curve illustrates
A) inefficient production. B) the law of increasing additional cost. C) a lack of scarcity. D) zero opportunity cost of moving from inefficient production to currently unobtainable production.
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