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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A particularly severe recession is called a(n):
A. lull. B. growth recession. C. depression. D. super recession.
What are the effects of an increase in labor productivity on potential GDP, the quantity of labor, the real wage rate, and potential GDP per hour of labor?
What will be an ideal response?
A game in which each player adopts its dominant strategy
A) will not lead to an equilibrium. B) can never result in a Nash equilibrium. C) could result in a Nash equilibrium. D) must be a cooperative game.
If certification decreases supply and serves as a barrier to entry, it ________ the price and ________ market power of the suppliers already in the market.
A) decreases; decreases B) decreases; increases C) increases; increases D) increases; decreases