Refer to the accompanying figure. 
Based on the Keynesian cross diagram, at short-run equilibrium output,
A. firms will be producing more than they can sell.
B. there is a recessionary gap.
C. there is an expansionary gap.
D. output equals potential output.
Answer: C
Economics
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Refer to the tables. Opportunity costs are:
A. constant in both Duckistan and Herbania.
B. larger in Duckistan than in Herbania.
C. increasing in both Duckistan and Herbania.
D. increasing in Duckistan and constant in Herbania.
Economics
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
Economics