Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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Which of the following is true about advertising?
A. It is a form of nonprice competition. B. It is an efficient form of competition. C. It is less important than price competition in oligopolistic and monopolistic competition. D. It is a major component of competition in perfectly competitive markets.
Refer to the above data. Assume that investment Ig is not affected by the income GDP level. The multiplier for this private open economy is:
All figures in the table below are in billions.
A. 1.25
B. 2.00
C. 2.50
D. 3.33
Suppose that after specializing according to comparative advantage, a country is trading with another nation that also specializes according to its comparative advantage. Which of the following statements are true for the first country?
i. It enjoys gains from trade. ii. It must have an absolute advantage in the production of the good it produces. iii. It is producing at a point beyond its PPF. A) ii and iii B) i and iii C) i, ii, and iii D) i only E) i and ii
Census data clearly shows the United States economy is becoming increasingly more oligopolistic
Indicate whether the statement is true or false