Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.

In the simple Keynesian framework, the price level

A) is fixed. B) varies directly with unemployment. C) varies inversely with wages. D) is indeterminate.

The labor-force participation rate of a country is 20%. The number of employed and unemployed people are 50 million and 20 million, respectively. The adult population of the country is _____

a. 70 million b. 120 million c. 450 million d. 350 million