When actual output equals potential output and the inflation rate is stable, the economy is said to be in ________ equilibrium.
A. contractionary
B. short-run
C. expansionary
D. long-run
Answer: D
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The interest rate effect is part of the reason
A) the long-run aggregate supply curve is vertical. B) the aggregate demand curve is downward sloping. C) the short-run aggregate supply curve is upward sloping. D) the aggregate demand curve is upward sloping.
Using expansionary policies to combat a recession would
A) decrease discretionary spending. B) increase federal revenue. C) increase a budget surplus. D) increase a budget deficit.
What impact do private insurance companies and Medicare have on national medical costs?
A) Medical costs go up because insurance leads to an increase in the quantity demanded of medical services. B) Medical costs go up because insurance will lead to the reduction in the supply of medical services due to the amount of paperwork required. C) Medical cost are unaffected by insurance companies. D) Medical costs go down because the insurance company pays the bill.
Ceteris paribus, if Korea increases the size of its military, then its production:
A. Possibilities curve will shift outward. B. Possibilities curve will shift inward. C. Of consumer goods will increase. D. Of consumer goods will decrease.