Since the wide spread acceptance of the Keynesian view during the 1960s,
What will be an ideal response?
perpetual budget deficits have been the norm.
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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
When positive externalities are present in a market, it means that:
A. private benefits are less than social benefits. B. private benefits are less than external benefits. C. social benefits are less than external benefits. D. external benefits are equal to social benefits.
PlayStations and PlayStation games are complementary goods. A technological advance in the production of PlayStations will
a. increase consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games. b. increase consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games. c. decrease consumer surplus in the market for PlayStations and increase producer surplus in the market for PlayStation games. d. decrease consumer surplus in the market for PlayStations and decrease producer surplus in the market for PlayStation games.
If the MPC for an economy is 0.90, a $4 billion increase in taxes will ultimately cause consumption to decrease by
A. $3.6 billion. B. $40 billion. C. $36 billion. D. $4.4 billion.