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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Aglets are the metal or plastic tips on shoelaces that make it easier to lace your shoes. The demand for aglets is probably
A) inelastic. B) unit elastic. C) elastic but not perfectly elastic. D) perfectly elastic.
Explain how it might be possible to discuss costs of production of a good or service without using monetary values
What will be an ideal response?
The invention of the cotton gin ushered in the Industrial Revolution and began a long period of technological innovation. What did this technological change do the short-run supply curve?
A) It moved the economy up along a stationary short-run aggregate supply curve. B) It shifted the short-run aggregate supply curve to the left. C) It moved the economy down along a stationary short-run aggregate supply curve. D) It shifted the short-run aggregate supply curve to the right.
Which of the following is an interest rate target specified in the FOMC directive?
A) Discount rate B) Treasury bond rate C) Federal funds rate D) The prime rate