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...
The four principal factors that Adam Smith identified as contributing to economic growth are
a. size of the labor force, degree of labor specialization, size of the capital stock, and level of technology b. size of the labor force, degree of labor specialization, size of the capital stock, and natural resource base c. size of the labor force, degree of labor specialization, size of the capital stock and the age of the labor force d. quality of the labor force, degree of labor specialization, size of the capital stock, and level of technology e. size of the labor force, quality of the labor force, degree of labor specialization, and natural resource base
An increase in the price of a good
A. increases the incentive to buy the good, but decreases the incentive to sell the good. B. decreases the incentive to buy the good, but increases the incentive to sell the good. C. increases both the incentive to buy the good and the incentive to sell the good. D. decreases both the incentive to buy the good and the incentive to sell the good.
As new firms enter and output expands in an increasing-cost industry, the increase in ______ for inputs causes the cost curves of all firms to shift ______.
a. demand; upward b. demand; downward c. supply; upward d. supply; downward
Use the above figure. The optimal position for the consumer is at
A. N. B. J or L. C. K. D. M.