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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Refer to Figure 4.2. A shift from D1 to D2 will result from which of the following?
A) an increase in expected future profits B) an increase in corporate taxes C) an increase in tax credits for savings D) a decrease in the desire of households to consume today
All of the following are characteristics of an oligopolistic market EXCEPT
A) firms must consider the actions of their rivals. B) cartels eventually form to keep prices high. C) firms have the ability to influence prices. D) firms earn lower profits than a monopoly.
If price were regulated to be equal to long-run marginal cost, the firm in Figure 13.3 would be:
A. making a zero economic profit. B. losing money. C. making a positive economic profit. D. breaking even.
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________. 
A. Rising; A B. Falling; A; C C. Falling; B: C D. Rising; A; C