Author Question: In the above figure, if the economy is in equilibrium at E1, then A) the economy is producing ... (Read 67 times)

Jkov05 · **on:** Jun 29, 2018

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.