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
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The land of Mordor increases its capital stock. As a result, the long-run aggregate supply curve shifts ________ and so does the ________ curve
A) rightward; aggregate demand B) leftward; aggregate demand C) rightward; short-run aggregate supply D) leftward; short-run aggregate supply
The table above shows some data that describe Tom's T-Shirts' total product when Tom's has 1 sewing machine. Diminishing marginal returns begin when the ________ is employed
A) second worker B) fifth worker C) fourth worker D) third worker
Typically, in towns and villages across the Midwest, bowling alleys are one-story buildings. In Manhattan, one is more likely to bowl in alleys found in multi-story high rises. How would the economic way of thinking explain this?
What will be an ideal response?
Which of the following statements is true?
A. Under floating exchange rates, external capital-flow shocks can have effects on internal balance by altering the exchange rate and the country's international price competitiveness. B. Monetary policy is a powerful economic tool for a country with fixed exchange rates and high capital mobility. C. An expansionary monetary policy tends to increase the exchange rate value of the domestic currency in the short run. D. Fiscal policy for a country with floating exchange rates is more powerful with a high degree of capital mobility than with a low degree of capital mobility.