An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.

Figure 4.4 illustrates the supply of tacos. An increase in the supply of tacos is represented by a movement from

A) point a to point b. B) point c to point b. C) S0 to S1. D) S2 to S1.

Which of the following is an assumption used when drawing a production possibilities frontier?

i. Human wants and desires are limited to what is available. ii. Only two goods are considered. iii. The level of technology is fixed and unchanging. A) i only B) ii only C) i and iii D) ii and iii E) i, ii, and iii