Use the following diagrams for the U.S. economy to answer the next question.If the economy is initially at full employment, which of the diagrams best portrays a recession as a result of an increase in the cost of production?

In the two-gap model, which of the following gaps, when binding, leads to foreign aid having the largest impact on GNP?

(a) Fiscal gap. (b) Savings gap. (c) Foreign exchange gap. (d) None of the above.

Figure 10-7

Refer to Figure 10-7. Which of the diagrams in Figure 10-7 represents a decrease in consumer spending combined with a positive supply shock?

a.
Panels (A) & (B)

b.
Panels (C) & (D)

c.
Panels (A) & (C)

d.
Panels (B) & (D)