In the short run, a firm might choose to produce rather than shut down even if its market price is less than its average total cost of production

If the economy enters a recession

A) frictional unemployment increases. B) structural unemployment decreases. C) cyclical unemployment increases. D) the number of workers on layoff decreases.

Using the information contained in Figure 4-7 above, the initial equilibrium Y is 3500. If there is 500 of new fiscal stimulus and a constant money supply, Y will increase to ________ and the interest rate will ________

A) 4000; remain constant B) 4000; rise to 10% C) 4500; rise to 12.5% D) 5500; remain constant