As inflation decreases, households become ________ uncertain leading to ________ spending.
A. more; less
B. less; less
C. less; more
D. more; more
Answer: C
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
A technological advance that increases the productivity of teachers can be expected to have what effects on the equilibrium labor market for teachers?
a. Wages will fall, and quantity of labor will rise. b. Wages will rise, and quantity of labor will rise. c. Wages will rise, and quantity of labor will fall. d. Wages will fall, and quantity of labor will fall.
The opening of a new American-owned factory in Algeria would tend to increase Algeria's GDP more than it increases Algeria's GNP because
a. some of the income from the factory accrues to people who do not live in Algeria. b. gross domestic product is income earned within a country by both residents and nonresidents, whereas gross national product is the income earned by residents of a country while producing both at home and abroad. c. all of the income from the factory is included in Algeria's GDP. d. All of the above are correct.
When the current state of the economy is such that Real GDP is greater than Natural Real GDP, the economy is in a(n) ____________________ gap. In this situation, the (actual) unemployment rate is ___________ than the natural unemployment rate, and there is a ________________ in the labor market
A) recessionary; greater; shortage B) inflationary; less; shortage C) inflationary; greater; surplus D) recessionary; greater; surplus E) recessionary; less; shortage