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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Human capital refers to the:
A. skills, experience, and natural talent that determine the productivity of workers. B. amount of people a firm has access to for production. C. production per capita. D. the machinery and tools that labor can use for production.
The major difference between a proprietorship and a partnership is the
a. double taxation laws b. change in the liability of the owners c. profit earned d. number of owners e. ownership control over day-to-day operations
The aim of the supply-side tax cuts is to push the economy’s aggregate supply curve outward to the right.
Answer the following statement true (T) or false (F)
If the cyclically adjusted deficit as a percentage of GDP is zero in one year and 1 percent of GDP the next year, it can be concluded that:
A. the federal government is borrowing money. B. fiscal policy is contractionary. C. fiscal policy is expansionary. D. the federal government is lending money.