Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.

A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower


Answer: C

Economics

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Regarding economic growth and income levels, which of the following is true?

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Economics

If prices in the United States fall relative to Japan, then the:

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Economics

Which of the following is a production decision?

A. How much output the firm should produce in the long run. B. Whether the firm should shut down or produce. C. Whether the firm should merge with one of its rivals. D. Whether the firm should exit or enter the market.

Economics