Starting from a long-run equilibrium, an increase in potential output leads to ________ gap in the short run and to ________ rates of inflation in the long run.
A. a recessionary; lower
B. an expansionary; lower
C. an expansionary; higher
D. a recessionary; higher
Answer: A
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Adam Smith noted in 1776 that
A. the wealth of nations comes from the money the nations have accumulated. B. the wealth of nations comes from the gold the nations have accumulated. C. the wealth of nations comes from the resources that produce the nation's goods and services. D. the problem of scarcity had been licked.
A tariff
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