Refer to Figure 16-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, Congress and the president would most likely
A) increase taxes.
B) increase the money supply and decrease the interest rate.
C) increase government spending.
D) increase oil prices.
E) raise interest rates.
A
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In the figure above, when the market is in equilibrium, marginal benefit ________ marginal cost, so the quantity of pizza produced is ________
A) equals; efficient B) exceeds; efficient C) is below; efficient D) is below; not efficient E) exceeds; not efficient
If real GDP exceeds potential GDP, this means that
a. output is below the level produced at the benchmark rate for high employment and high rate of resource utilization. b. this cannot occur; the economy can never be at a point where real GDP exceeds potential GDP. c. cyclical output is above what the economy can sustain in the long-run. d. the economy is expanding.