Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. higher; higher
B. lower; potential
C. higher; potential
D. lower; higher
Answer: C
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Shortly after the 2012 election, the AMT was reformed to
A. reduce the tax liabilities of the taxpayers with the lowest taxable incomes. B. index its thresholds for inflation. C. reduce the tax liabilities of the taxpayers with the highest taxable incomes. D. remove inflation.
Suppose Marquette Bank and Trust has $10 million in total deposits and the required reserve ratio is 7%. How many dollars can the bank use to seek profit opportunities?
A) $9.3 million B) $7 million C) $930,000 D) $700,000 E) 0. Banks cannot seek profits.
The tax incidence of a specific tax or ad valorem tax is influenced by
A) who pays the tax. B) the amount of the tax. C) the price elasticities of supply and demand. D) All of the above.
Based on the given figure, the economy is initially in long-run equilibrium at point A. If there is a favorable supply shock that increases potential output and shifts the long-run aggregate supply curve from LRAS to LRAS', then the new long-run equilibrium is reached at point:
A. E. B. C. C. B. D. D.