As the slope of the aggregate supply curve increases, this indicates that
A. the economy is getting close to potential GDP.
B. the economy is reducing employment.
C. inflation will be less of a problem.
D. output is falling.
Answer: A
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What effect would a simplification of federal tax law have on the cost of hiring a tax accountant?
A) It would fall because tax accountants would have fewer valuable opportunities. B) It would rise because tax accountants would have to raise their prices to maintain their incomes. C) It would have no effect because only supply affects costs, not demand. D) It would have very little effect because most of the costs of becoming an accountant are sunk costs.
The reason the production possibilities curve is bowed outward (concave) is
A) the law of increasing additional cost. B) that technology is constantly changing. C) that the number of resources is increasing. D) that the economy has more capital goods than entrepreneurial effort.
Refer to the accompanying figure. The absolute value of the slope of the demand curve D1 is ________, and the absolute value of the slope of demand curve D2 is ________.
A. 5/4; 4/5 B. 4/5; 5/4 C. 1/2; 2 D. 2; 1/2
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