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

Economics

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A) that your activity provides to someone else. B) of producing a good or service when the total benefit from the good or service exceeds its total cost. C) that is received from consuming one more unit of a good or service. D) of consuming another good or service divided by the total number of goods or services produced.

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An open market purchase of government securities by the Fed would shift the aggregate demand curve leftward

Indicate whether the statement is true or false

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Refer to Figure 15-3. Suppose the monopolist represented in the diagram above produces positive output. What is the profit-maximizing/loss-minimizing output level?

A) 630 units
B) 800 units
C) 850 units
D) 880 units

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The marginal income tax rate is equal to

A) the total tax payment divided by total income. B) the change in the tax payment divided by the change in income. C) the average tax payment divided by the total tax payment. D) the percent of total income that goes to taxes.

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