If the economy is falling below potential real GDP, which of the following would be an appropriate fiscal policy to bring the economy back to long-run aggregate supply? An increase in
A) government purchases.
B) the money supply and a decrease in interest rates.
C) taxes.
D) oil prices.
A
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When an economy experiences a one-time increase in productivity, there is an increase in the long-run, steady state value of ________
A) the growth rate of output B) the depreciation rate C) consumption per worker D) the saving rate
In the long run, the expansion path is
A) horizontal. B) vertical. C) diagonal. D) Not enough information.
If the government cuts the tax rate, workers get to keep
a. less of each additional dollar they earn, so work effort increases, and aggregate supply shifts right. b. less of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left. c. more of each additional dollar they earn, so work effort increases, and aggregate supply shifts right. d. more of each additional dollar they earn, so work effort decreases, and aggregate supply shifts left.
What are the characteristics of the perfectly competitive market?
What will be an ideal response?