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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Which of the following would shift the aggregate demand curve to the left?
A) an increase in the money supply B) a cut in federal income taxes C) an expected decrease in future income D) an increase in the price level
The price of a pound of sirloin steak is five times the price of a pound of ground beef. You are not in consumer equilibrium unless: a. you consume five times as much ground beef as you do sirloin steak
b. you consume five times as much sirloin steak as you do ground beef. c. the total utility you derive from consuming sirloin steak is five times the total utility you derive from consuming ground beef. d. your marginal utility from the last pound of sirloin steak consumed is five times that of the last pound of ground beef consumed.
The time spent by students in college
a. leads to lower future wages b. is an investment in human capital c. decreases human capital by lowering work experience d. would be a positive compensating wage differential in markets for student labor e. increases as the wage rate rises
The conclusion that oligopoly is inefficient relative to the competitive ideal must be qualified because:
A. industry price leaders often select a price equal to marginal cost. B. over time oligopolistic industries may promote more rapid product development and greater improvement of production techniques than if they were purely competitive. C. increased output due to persuasive advertising may perfectly offset the restriction of output caused by monopoly power. D. many oligopolists sell their products in monopolistically competitive or even purely competitive industries.