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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Exceptionally favorable growing conditions in the vineyards of Napa Valley would cause a(n)
a. increase in the demand for wine, increasing price. b. increase in the supply of wine, decreasing price. c. decrease in the demand for wine, decreasing price. d. decrease in the supply of wine, increasing price.
If the total sum of squares (SST) in a regression equation is 81, and the residual sum of squares (SSR) is 25, what is the explained sum of squares (SSE)?
A. 64 B. 56 C. 32 D. 18
Government intervention can be justified on efficiency grounds when at least one of the efficiency conditions are not being met.
Answer the following statement true (T) or false (F)
If a monopolistically competitive firm lowers its price and, as a result, its total revenue decreases then
A) the output effect of the price change was less than the price effect. B) the output effect of the price change was greater than the price effect. C) the firm's demand curve must have decreased. D) the substitution effect of the price change was greater than the income effect.