Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential
B. expansionary; lower; potential
C. expansionary; higher; potential
D. recessionary; lower; lower
Answer: A
You might also like to view...
For which of the following products is demand likely to be least elastic with respect to price?
A. Green beans B. Vegetables C. Food D. Green vegetables
The Federal Open Market Committee consists of all the following people except
A) the Board of Governors of the Federal Reserve System. B) five presidents of Federal Reserve Banks, on a rotating basis. C) the chairman of the President's Council of Economic Advisors. D) the President of the Federal Reserve Bank of New York.
Suppose a permanent technological improvement raises labor's marginal productivity. Whether or not workers own capital, we can conclude that
a. the wage rate will rise. b. employment will fall. c. the supply of labor will rise. d. the demand for labor will fall.
A reduction in money wages shifts...
What will be an ideal response?