Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher
B. expansionary; higher; potential
C. recessionary; higher; potential
D. recessionary; lower; lower
Answer: B
You might also like to view...
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Protecting infant industries from foreign competition may make sense, but only until the industry matures
a. True b. False Indicate whether the statement is true or false
A prisoner's dilemma illustrates situations in which:
A. there is a conflict between the narrow self-interest of individuals and the broader interests of a group. B. resources with the lowest opportunity cost should be used first. C. efficiency is an important social goal. D. everyone does best when each person specializes in the activities in which he or she has a comparative advantage.
If you wanted to produce at an output of 80, in the long run you would choose a plant whose size is represented by
A. ATC1.
B. ATC2.
C. ATC3.
D. ATC4.