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

Economics

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Some economists argue that corporate income taxes are typically not paid by firms, but by

A) stockholders, employees, and consumers. B) the government. C) bond holders. D) the board of directors of the firm.

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Tom and Jerry have two tasks to do all day: make dishes and build fences. If Tom spends all day making dishes, he will have make 16 dishes. If he instead devotes his day to building fences, Tom will build 4 fences. If Jerry spends his day making dishes, he will make 14 dishes; if he spends the day building fences, he will build 7 fences. For Jerry, the opportunity cost of building a fence is ________ dishes made.

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Firms that emit toxins into the air:

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Economics