Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential
B. expansionary; lower; potential
C. expansionary; higher; potential
D. recessionary; lower; lower
Answer: A
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As interest rates fall, the
A) promised payments of bonds fall. B) face values of bonds fall. C) price of bonds rises. D) price of bonds falls.
In the income-expenditure model, if autonomous saving increases by $15 billion, _____
a. the aggregate expenditure line shifts upward by $15 billion b. planned investment increases by $15 billion c. the aggregate expenditure line shifts downward by $15 billion d. planned investment decreases by $15 billion e. the equilibrium level of real GDP demanded decreases by $15 billion
According to classical economists,
A) spending equals saving. B) saving equals income. C) income equals wealth. D) none of the above
Phase of the business during which the economy is growing faster than usual
What will be an ideal response?