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
You might also like to view...
What characterizes a competitive equilibrium?
A) Markets are rationed. B) Governments stay out of the market. C) Economic agents are price-takers. D) It is costly to experiment with policies.
By definition, a firm that practices satisficing
a. maximizes its sales, not its profits. b. makes acceptable decisions, though not necessarily optimal ones. c. satisfies government guidelines instead of consumer demands. d. minimizes the cost of gathering enough information to make an optimal decision.
If the average cost of transporting a passenger on the train from Chicago to St. Louis is $75, it would be irrational for the railroad to allow any passenger to ride for less than $75
a. True b. False Indicate whether the statement is true or false
One major problem with Social Security is that it is a “pay as you go” system.
Answer the following statement true (T) or false (F)