An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.

A. decrease; increase
B. increase; increase
C. decrease; decrease
D. increase; decrease


Answer: D

Economics

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Supply-side economists argue that changes in tax rates cause changes in

A) labor supply. B) the full-employment level of output. C) saving. D) all of the above.

Economics

For substitutes, cross price elasticity of demand is:

a. Negative b. Positive c. between zero and one only d. zero.

Economics

Central Banks

What will be an ideal response?

Economics

Lanny is attempting to determine his firm’s economic profits for the previous year. He already knows what its accounting profits were. To calculate its economic profits, Lanny also needs to know the firm’s ______ for the previous year.

a. economic income b. implicit costs c. marginal benefits d. explicit losses

Economics