If new firms enter a perfectly competitive industry, the
a. market supply curve will shift to the left, market price will fall, and industry output will increase
b. market supply will shift to the left, market price will rise, and the industry output will increase
c. market demand will shift to the right, market price will increase, and market output will increase
d. market supply will shift to the right, market price will fall, and market output will increase
e. market supply will shift to the right, market price will increase, and market output will decrease
D
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A decrease in government expenditure would shift the:
A) aggregate demand curve rightward. B) aggregate demand curve leftward. C) aggregate supply curve rightward. D) aggregate supply curve leftward.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A