When actual output equals potential output and the inflation rate is equal to the expected rate of inflation, the economy is said to be in ________ equilibrium.
A. long-run
B. recessionary
C. short-run
D. expansionary
Answer: A
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An understanding of the principles of public sector economics can help us create _____
a. innovative public policies b. a more effective government c. a protective government that better shields its citizens from risk d. new spending programs
A long-lived cartel maximizes its joint profits by restricting production to push up prices. Firm A cheats by temporarily raising its production. Which response by Firm B illustrates a tit-for-tat game?
a. Firm B temporarily raises its prices. b. Firm B temporarily raises its production. c. Firm B permanently lowers its production. d. Firm B permanently lowers its prices.
If increases in government spending lead to inflation, the value of the multiplier is reduced.
Answer the following statement true (T) or false (F)
If the prices of imported resources increase, then aggregate supply will decrease.
Answer the following statement true (T) or false (F)