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
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Of the following OECD countries, which has the highest life expectancy at birth?
A) the United Kingdom B) Japan C) Canada D) the United States
Which of the following will result in a decrease in demand for residential housing in the short run?
A) a decrease in the price of lumber B) an increase in the wages of carpenters C) a decrease in real household incomes D) a decrease in the prices of residential housing
Suppose the multiplier effect for Japan is 0.8 for any $1 billion change in U.S. government purchases. Therefore, Japanese real GDP will rise by $8 billion when U.S. government spending rises by $10 billion
a. True b. False Indicate whether the statement is true or false
One factor limiting the Federal Reserve's ability to use monetary policy to stimulate the economy is that the Federal Reserve has
A. tools to lower interest rates, but they do not work at interest rates below 0%. B. tools to lower interest rates, but they do not work at interest rates below 10%. C. no tools at its disposal to lower interest rates. D. tools to lower interest rates, but they do not work at interest rates above 10%.