Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher
B. expansionary; higher; potential
C. recessionary; higher; potential
D. recessionary; lower; lower
Answer: B
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
An increase in Social Security payments will
A) increase export spending. B) increase investment spending. C) increase consumption spending. D) increase government spending.
When the minimum wage is set below the market equilibrium wage, it does not affect the market.
Answer the following statement true (T) or false (F)
A firm with market power has an individual consumer demand of Q = 20 ? 4P and costs of C = 4Q. What is optimal price to charge for a block of 20 units?
A. $36 B. $18 C. $90 D. $72