Table 10-1
Aggregate Quantity
Aggregate Quantity
?
Demanded
Supplied
Price
(billions)
(billions)
Level
$3500
$2900
65
3400
3000
75
3350
3150
90
3250
3250
110
3100
3400
130
In Table 10-1, if full employment occurs at $3,400 billion, then
A. the economy experiences a recessionary gap of $75 billion.
B. the economy experiences a recessionary gap of $150 billion.
C. the economy experiences an inflationary gap of $75 billion.
D. the economy experiences an inflationary gap of $150 billion.
Answer: B
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A) an upward shift in the WS curve. B) a downward shift in the WS curve. C) an upward shift in the PS curve. D) a movement along the WS and the PS curves. E) none of the above
Suppose that 19th-century politicians had succeeded in their attempt to impose a "single tax"-a tax on suppliers of land (i.e., landlords). Most of the economic burden of the tax would have been borne by
a. renters, because the demand for land is generally less elastic than its supply. b. renters, because the demand for land is generally more elastic than its supply. c. landlords, because the demand for land is generally less elastic than its supply. d. landlords, because the demand for land is generally more elastic than its supply.