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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In a system of perfectly flexible exchange rates, an expansionary U.S. monetary policy will cause
a. a rise in the value of the dollar relative to foreign currencies. b. a fall in the value of the dollar relative to foreign currencies. c. no change in the value of the dollar relative to foreign currencies. d. a change in the value of the dollar relative to foreign currencies but the direction of the change is uncertain.
Economic rent is
A) the return to owners of farmland. B) the return to landlords. C) a payment for the use of any resource above its opportunity cost. D) a payment for land, an apartment, or a house that one does not own.
An entrepreneur is a(n)
a. individual who has much education b. organizer who seeks profitable opportunities and is willing to accept risks c. business organization that uses inputs to produce output d. administrator who runs an enterprise without accepting any risk of financial loss e. depot or storehouse for commercial products
Government purchases include spending on goods and services by
a. the federal government only. b. state and federal governments only. c. local, state and federal governments. d. local, state and federal governments, as well household spending by employees of those governments.