Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.

A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher


Answer: B

Economics

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What will be an ideal response?

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Discretionary fiscal policy is so named because it:

A. involves specific changes in T and G undertaken expressly for stabilization at the option of Congress. B. is undertaken at the option of the nation's central bank. C. occurs automatically as the nation's level of GDP changes. D. is invoked secretly by the Council of Economic Advisers.

Economics