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This question was created from Econ_1A_Exam_3_Spring_2007


Figure 10.1
19. In Figure 10.1, suppose this economy is in equilibrium at Point b and Q, represents full
employment output. Which of the following statements is true?
A) This economy has a GDP gap of $100 billion.
B) This economy has a GDP gap of less than $100 billion.
C) This economy has a GDP gap of more than $100 billion.
D) This economy does not have a GDP gap.
20. In Figure 10.1, which of the following could cause a shift from AD, to AD, ceteris
A) An increase in consumer confidence.
B) A decrease in interest rates.
C) A decrease in government spending on the environment.
D) An increase in exports.

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