An equal increase in government purchases and taxes will cause
A) an increase in real GDP.
B) an increase in the budget surplus.
C) no change in real GDP.
D) a reduction in cyclically adjusted budget surplus.
A
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Refer to Table 2-8. What is Betty's opportunity cost of making a bench?
A) 1/2 of a statue B) 2.8 statues C) 1.75 benches D) 2 statues
If the aggregate supply curve is upward sloping, then an increase in autonomous consumption leads to a(n)
A) increase in aggregate demand and a rise in the price level. B) decrease in aggregate demand and a rise in the price level. C) decrease in aggregate demand and a fall in the price level. D) no change in aggregate demand and no change in the price level.
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
The figure above shows a production possibilities frontier. In the figure, when the economy moves from point C to point B, what is the opportunity cost of a DVD?
A) 0.5 cell phones B) 2 cell phones C) 0.5 million cell phones D) 2 million cell phones E) zero