Figure 7-5 -Refer to Figure 7-5. Which of the Following Statements Is

question 133

Multiple Choice

Figure 7-5
-Refer to Figure 7-5. Which of the following statements is true?

• A) The economy depicted in the figure experiences an inflationary gap = Y₂ *Y_p.
• B) The economy depicted in the figure experiences an inflationary gap = Y₁ *Y_p.
• C) The economy depicted in the figure experiences an inflationary gap = Y₁*Y₂.
• D) The economy depicted in the figure is in long-run equilibrium but not in short-run equilibrium.

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Definitions:

Implicit Costs

The opportunity costs of using resources owned by the firm for its operations instead of renting, selling, or utilizing them in other ways.

Implicit Costs

The opportunity costs of using resources that a firm already owns, typically non-out-of-pocket costs.

Explicit Costs

Direct, out-of-pocket payments for goods or services used in production, such as wages or rent.

Accounting Profit

The financial gain calculated by subtracting total explicit costs from total revenue, not considering implicit costs.