Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential
B. expansionary; lower; potential
C. expansionary; higher; potential
D. recessionary; lower; lower
Answer: A
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Which of the following are examples of goods that have been subject to voluntary export restraints?
A) Japanese cars and Chinese solar panels B) Belgian chocolates and French wines C) French wines and cheeses D) Japanese sushi and German cars E) Taiwanese electronics and Canadian barley
Cashews and asparagus are normal goods. When the price of asparagus falls, the substitution effect by itself causes
a. the consumer to feel richer, so the consumer buys more cashews. b. the consumer to feel richer, so the consumer buys less cashews. c. cashews to be relatively more expensive, so the consumer buys less cashews. d. cashews to be relatively less expensive, so the consumer buys more cashews.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, a decrease in unemployment may be represented by the movement from
A. B to A. B. C to D. C. B to D. D. A to C.
When the owner of an asset sells it for more than she paid for it, she has a(n)
A. asset accumulation. B. unnatural profit. C. realized capital gain. D. tax-free profit.