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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All of the following involve a moral hazard problem EXCEPT
A) an individual driving carelessly after buying a comprehensive insurance policy for a Ford Pinto. B) the IMF bailing Mexico out of a financial crisis, with promises to do the same for other nations that might face financial problems. C) making regular visits to your doctor because you know that you have full healthcare coverage. D) the requirement of banking institutions that owners invest a substantial portion of their own capital in their bank. E) membership in FDIC (Federal Deposit Insurance Corporation) by your local bank.
Large barriers to entry exist in which of the following market structures?
A. Perfect competition only B. Monopoly only C. Perfect competition and monopolistic competition D. Oligopoly and monopoly
If total production (TP) is greater than total expenditures (TE), it follows that
A) producers have produced more than individuals buy. B) optimum inventory levels rise. C) firms have underproduced. D) actual inventory levels unexpectedly rise. E) a and d
What are the conditions for price discrimination?
What will be an ideal response?