The movements of real GDP and inflation during the 1973–1975 recession can be best explained by a
A. rightward shift of the aggregate demand curve.
B. leftward shift of the aggregate demand curve.
C. rightward shift of the aggregate supply curve.
D. leftward shift of the aggregate supply curve.
Answer: D
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If a rent ceiling is below the equilibrium rent, some allocation scheme must be used. The allocation methods include all of the following EXCEPT
A) charging the equilibrium rent. B) refusing to rent to individuals on the basis of sex, race, or some other attribute. C) requiring a payment, such as key money, in addition to the rent. D) the creation of a black market. E) increased search activity.
According to economic theory, the political process tends to
A) benefit every participant equally. B) harm every participant equally. C) concentrate benefits in the hands of special interest groups and disperse the costs throughout the uninformed voters. D) support public projects that clearly pass a strict benefit-cost analysis.