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
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Refer to Figure 9.5. The firm is producing Q units. Which area represents revenue?
A. ABCDE
B. CHGD
C. EDGF
D. ABHF
A shift outward of the aggregate supply curve could be caused by
a. higher import prices. b. lower import prices. c. energy shortages. d. rising wage rates.
For any given growth rate of aggregate supply, a faster growth rate of aggregate demand will lead to more inflation and faster growth of real output.
Answer the following statement true (T) or false (F)
If the government knew the level of potential income and had sufficient information about the economy it could fine-tune the economy.
Answer the following statement true (T) or false (F)