If the economy in the graph shown is at point D, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase corporate income taxes.
B. increase government spending.
C. decrease income taxes.
D. All of these would bring the economy back to potential GDP.
Answer: A
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Which of the following most accurately describes the "Fisher effect?"
a. Interest rates increase after inflation and decrease after deflation, but with a long lag. b. Interest rates are independent of inflation and deflation. c. Interest rates increase after inflation, but are not affected by deflation. d. Increasing interest rates precede inflation and decreasing interest rates precede deflation.
Marginal resource cost is the
a. cost of hiring another unit of a resource b. additional revenue generated by hiring one more unit of a resource c. additional output generated by hiring one more unit of a resource d. total cost of hiring a resource e. average cost of hiring a resource
Consider a labor market in equilibrium. If the demand curve shifts to the left while the supply curve shifts to the left, then the number of workers hired in the market will:
A. increase. B. decrease. C. remain unchanged. D. either increase or decrease or remain unchanged.
Assumptions in models tend to make
A) the model predict what the scientist wants the results to be. B) the model more realistic. C) the model more applicable to specific circumstances. D) the model always predict the future accurately.