An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease
Answer: D
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If the president begins making laws that citizens must abide by or be punished based on the opinion of the president, this is called the:
A. rule of man B. rule of one C. rule of force D. rule of law
During George W. Bush's presidency
A. the job market was quite robust. B. The United States' federal budget deficit hit a record high. C. the federal budget surpluses in the last years of the Clinton presidency continued. D. we experienced a very high inflation rate.
A year-long drought that destroys most of the summer's crops would be considered a:
A. short-run supply shock. B. long-run demand shock. C. long-run supply shock. D. short-run demand shock.
Supply-side policy suggests that if we _______ taxes of workers, the _________ labor will increase, causing equilibrium wages to ________.
A. raise, supply of, decrease B. cut, supply of, increase C. raise, demand for, increase D. cut, supply of, decrease