In the above figure, if the economy is in equilibrium at E1, then ...

[Jkov05]

In the above figure, if the economy is in equilibrium at E1, then
 
  A) the economy is producing below its potential long-run equilibrium at full employment.
  B) the economy is producing above its potential long-run equilibrium at full employment.
  C) there is an inflationary gap in the economy.
  D) the economy is in a period of high inflation.

Question 2

If you invest in a foreign company by buying 28 percent of its shares of stock, you have engaged in
 
  A) portfolio investment.
  B) moral hazard.
  C) foreign direct investment.
  D) adverse selection.

[elizabethrperez]

Answer to Question 1

A

Answer to Question 2

C

[Jkov05]

Thanks for the timely response, appreciate it

[daiying98]

Excellent