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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An auto worker in Ohio who loses her job because the company relocated the plant to another country represents an example of
A. cyclical unemployment. B. structural unemployment. C. frictional unemployment. D. seasonal unemployment.
Which of the following decreases in labor demand is due to a change in product demand?
A. An increase in the price of paper increases the cost of making books, thus decreasing the demand for bookbinders B. The widespread availability of news on the Web reduces the demand for newspaper workers C. An increase in the price of steel increases the cost of producing cars and trucks, thus decreasing the demand for automobile workers D. A decline in productivity in retailing decreases the demand for retail sales workers
Amy can produce either 5000 pounds of cheese or 20 cars per year. Mike can produce either 5000 pounds of cheese or 10 cars per year. Amy's opportunity cost of producing one car is ________ pounds of cheese.
A. 250 B. 1/20 C. 1/250 D. 20
Kevin owns a personal training gymnasium in Orlando. The above figure shows the demand and cost curves for his firm, which competes in a monopolistically competitive market. What price will Kevin charge per session?
A) $100 B) $60 C) $40 D) $20 E) $80