For an economy starting at potential output, an increase in autonomous expenditure in the short run results in a(n):
A. decrease in potential output.
B. expansionary output gap.
C. increase in potential output.
D. recessionary output gap.
Answer: B
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Comparable worth legislation
A) guide markets toward the economically efficient wage. B) mandate that employers pay the same wages to workers, regardless of their gender, for jobs that have comparable worth. C) will eliminate the earnings gap between men and women. D) mandate that potential employers demonstrate that they are worth the wages they expect to earn.
A(n) ________ is an example of a quota where foreigners hold quota licenses
A) voluntary export restraint B) embargo C) auction quota D) All of the above
An international comparison of eight major industrialized countries reveals the following about the components of GDP: ________
A) the U.S. has one of the largest shares of GDP going to investment B) the U.S. has one of the smallest government share of GDP C) the U.S. runs one of the largest trade deficits D) all of the above E) none of the above
A weakness of the classical model is
a. the quality of its explanations for long-run movements of the economy b. its confusion between the long and short run c. its assumption that the labor market always clears d. its treatment of crowding out in the long run e. its inadequate attention to the long run