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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Monopolistic competition is judged to be economically inefficient because
A) the price is greater than marginal cost. B) firms earn zero economic profit in the long run. C) marginal revenue equals marginal cost. D) firms have deficient capacity in the long run. E) firms earn an economic profit in the long run.
If the unemployment rate is 8 percent, this means: a. 8 percent of the population is unemployed
b. 8 percent of the population over age 16 is unemployed. c. 8 percent of the labor force is unemployed. d. the number of unemployed persons equals 8 percent of the employed persons.
Which of the following examples would most likely have the highest economic well- being?
a. a country with $30,000 per capita and a 50 hour work week b. a country with $25,000 per capita and a 40 hour work week c. a country with $40,000 per capita and a 45 hour work week d. a country with $40,000 per capita and a 35 hour work week
Which of the following is not true about M1?
A. Savings accounts makes up approximately one-third of it. B. It includes the most liquid forms of money. C. It is the narrowest definition of the money supply. D. Currency in circulation makes up approximately half of it.