In Figure 5.1, the demand curve that is perfectly inelastic is on graph:

A. A.
B. B.
C. C.
D. D.

Answer: A

Economics

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Often, the farther real GDP is below potential GDP,

A) the smaller the multiplier effect. B) the larger the multiplier effect. C) the less effective is the multiplier effect. D) the less meaningful is the multiplier effect.

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A movement along the production possibilities curve would imply that

A) the labor force has grown. B) productivity has increased. C) society has chosen a different set of outputs. D) productivity has declined because workers are demanding more leisure.

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