Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower
Answer: C
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Decision trees are commonly used to illustrate how firms make business decisions that depend on the actions of rival firms. A decision tree has boxes that contain points that represent when firms must make the decisions contained in the boxes
What are these points called? A) decision options B) decision nodes C) option points D) either-or terminals
The giving up of a good or activity in order to obtain some other good or activity is called:
a. a tradeoff. b. a cost analysis. c. a random choice. d. an opportunity cost. e. a sunk cost.
Economic rent is a payment for a factor of production that elicits an increase in the quantity supplied
a. True b. False Indicate whether the statement is true or false
For a worker, the opportunity cost of an hour of leisure
a. rises by $8 when his wage rises by $8 per hour. b. falls by $8 when his wage rises by $8 per hour. c. is the same for a celebrity talk-show host as it is for a teacher. d. is determined by factors that are unrelated to his hourly wage.