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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Rob took the afternoon off from his job as a tire salesman to mow his lawn. Rob told his wife that this made sense because he would be saving the $50 he would have to pay a lawn service, noting that this would be the opportunity cost to the family. Rob’s wife disagreed. What did Rob’s wife say?
A. The opportunity cost would be Rob’s lost income from selling tires that afternoon plus the $50. B. The opportunity cost would be Rob’s lost income from selling tires that afternoon minus the $50. C. That Rob just wanted to take the afternoon off. D. The opportunity cost would be Rob’s lost income from selling tires that afternoon.
The above table gives the initial balance sheet for Mega Bank. Mega Bank's desired reserves equal its required reserves. Based on the initial balance sheet, what is the required reserve ratio for Mega Bank?
A) 3 percent B) 10 percent C) 30 percent D) 1.4 percent
The rising phase of a business cycle measured by an increase in real GDP is called:
A) trough. B) expansion. C) recession. D) contraction.
Payoffs are:
A. the rewards that come from particular actions. B. always monetary. C. things that are only enjoyed by the winner. D. bribes made to gain some advantage unfairly during a game.