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
Answer: A
You might also like to view...
When economists refer to an economy's price level, they indicate: a. the rate of inflation in that economy
b. the prices of goods and services relative to consumers' incomes. c. a composite measure of prices of all goods and services. d. a period of level, or steady, prices in that economy. e. the price of a specific consumer good.
Which of the following would shift the investment demand curve rightward?
a. Firms are operating their plants at less than full capacity. b. A decrease in the interest rate. c. A decrease in business taxes. d. All of the above. e. None of the above.
Which of the following best describes the implications of the law of comparative advantage? If each person sells goods for which he or she has the greatest comparative advantage in production and buys those for which his or her comparative advantage is least, the
What will be an ideal response?
Refer to the diagram. Which of the following would shift the investment demand curve from ID 1 to ID 2
A. A lower interest rate.
B. Lower expected rates of return on investment.
C. A higher interest rate.
D. Higher expected rates of return on investment.