On the graph above, suppose the economy is at point 1. Which sequence of points best illustrates the short-run and then long-run impacts of a permanent tax reduction? [Assume that potential output remains constant at .]
A) 2, 4, 1
B) 7, 2, 5
C) 2, 7, 6
D) 7, 8, 1
C
You might also like to view...
If the required reserve ratio is 10 percent, currency in circulation is $400 billion, checkable deposits are $1000 billion, and excess reserves total $1 billion, then the M1 money multiplier is
A) 2.5. B) 2.8. C) 2.0. D) 0.7.
Economic fluctuations: a. are linked, but not perfectly synchronized, across countries
b. are perfectly synchronized across countries. c. in one country are independent of fluctuations in other countries. d. in the United States always occur after fluctuations in other developed economies. e. in the United States usually occur before fluctuations in other developed economies.
A black market may arise when government imposes a price ceiling
a. True b. False Indicate whether the statement is true or false
A capital inflow occurs when:
A. money saved domestically is invested in another country. B. money saved in another country finances domestic investment. C. there is a negative difference between capital inflows and capital outflows for a country. D. there is a positive difference between capital inflows and capital outflows of a country.