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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The more inelastic the demand curve, a monopoly
A) will have a smaller Lerner Index. B) will face a lower marginal cost. C) will earn less profit. D) will lose fewer sales as it raises its price.
The expenditure approach to measuring GDP involves adding up the purchases of final goods and services by market participants
a. True b. False Indicate whether the statement is true or false
A reduction in G or an increase in T would lead to lower real interest rates in the United States, a depreciating dollar, and, eventually, a smaller trade deficit..
Answer the following statement true (T) or false (F)
If a natural monopolist is unregulated, then
A) the monopoly will produce efficiently from society's point of view. B) the monopoly will produce inefficiently from society's point of view. C) the monopolist will be earning just a normal rate of return on investment. D) the monopolist will determine the profit maximizing quantity by equating marginal cost to the demand curve.