Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower
Answer: C
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If Mr. McConaughey has 7 hours to spend with friends and family and breaking a sweat, he will maximize his utility if he spends
A) 2 hours with family and friends and 5 hours breaking a sweat. B) 5 hours with family and friends and 5 hours breaking a sweat. C) 4 hours with family and friends and 3 hours breaking a sweat. D) 3 hours with family and friends and 4 hours breaking a sweat.
Countercyclical fiscal policy has a serious problem with
a. the timing of its enactment and impact. b. the easy reversibility of policy. c. the tendency of the Federal Reserve to immediately counter Congressional action. d. the courts as it has been held to be unconstitutional. e. Presidential executive orders.
If the long-run Phillips curve shifts to the right, then for any given rate of money growth and inflation the economy has
a. higher unemployment and lower output. b. higher unemployment and higher output. c. lower unemployment and lower output. d. lower unemployment and higher output.
If a firm in monopolistic competition is neither making a profit nor suffering a loss, its AR curve is
a. horizontal. b. touching its AVC curve. c. touching its ATC curve. d. below its MR curve.