Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
You might also like to view...
Mexico and the members of OPEC produce crude oil. Realizing that it would be in their best interests to form an agreement on production goals, a meeting is arranged and an informal, verbal agreement is reached. If both Mexico and OPEC abide by the agreement, then OPEC's profit will be $200 million and Mexico's profit will be $100 million. If both Mexico and OPEC cheat on the agreement, then OPEC's profit will be $175 million and Mexico's profit will be $80 million. If only OPEC cheats, then OPEC's profit will be $185 million, and Mexico's profit will be $60 million. If only Mexico cheats, then Mexico's profit will be $110 million, and OPEC's profit will be $150 million. You may find it helpful to fill in the payoff matrix below. src="https://sciemce.com/media/4/ppg__rrr0818190951__f1q237g1.jpg" alt="" style="vertical-align: 0.0px;" height="203" width="377" />To OPEC, the payoff to abiding by the agreement is either:
A. $60 million or $100 million.
B. $175 million or $185 million.
C. $150 million or $200 million.
D. $200 million or $185 million.
Which of the following statements is true?
A) When two nations specialize and trade, there is a loss of efficiency and both the nations are made worse off. B) Trade between two nations is most beneficial when neither has a comparative advantage in the production of any goods and services. C) Trade between nations allows each nation to specialize in the production of goods in which it has comparative advantage. D) Trade between two nations is possible only when the opportunity costs of producing goods and services in both nations are identical.
Refer to Table 8-17. What is nominal GDP in 2016?
A) $3,320 B) $3,690 C) $6,360 D) $7,035
Bookstores often offer annual memberships that allow customers to purchase books at a 10% discount. Explain why this may increase profits of the bookstore
What will be an ideal response?