Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher
B. expansionary; higher; potential
C. recessionary; higher; potential
D. recessionary; lower; lower
Answer: B
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If the amount of high-powered money were 100 and the bank reserve holding ratio was 0.25 then the maximum stock of money would be (assume that citizens prefer to keep 10% of their money)
A) 100/0.25 which is 400. B) (100 )(1.35 ) which is 540 0.25. C) (100 )(1.1 ) which is approximately 314 0.35. D) (100 )(1.35 ) which is approximately 386 0.35.
We assume that the representative consumer's preferences exhibit the properties that
A) they evolve over time and that more is always preferred to less. B) more is preferred to less and that the consumer prefers diversity. C) the consumer likes diversity and that more is sometimes preferred to less. D) more is sometimes preferred to less and that consumption and leisure are both normal goods.
Primary liabilities of the Federal Reserve include
a. Federal Reserve notes. b. U.S. government securities. c. loans to banks. d. reserve deposits by banks. e. Both a and d
Other things equal, a person with a cosmetician's certificate from a vocational school will earn $4,000 more per year than a person without one, starting the year the certificate is received. But after 6 years, the difference in income will disappear because styles have changed. If the interest rate is 5 percent (0.05) per year, what is the present value of having just received a certificate?
(Assume that each year's income is received at the end of the year.) a. $21,317.91 b. $24,000.00 c. $22,857.14 d. $19,379.92 e. It depends on the cost of acquiring the certificate