Monetarists believe that changes in monetary policy would have:
a. only short-term effect on the price level.
b. only short-term effect on real GDP.
c. only long-term effect on real GDP.
d. no effect on price level and real GDP.
e. both short-term and long term effect on real GDP.
b
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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
One common measure of the "standard of living" in a nation is ________.
A. real GDP B. population size C. the unemployment rate D. real GDP per capita
Which of the following effects takes place as a result of automatic stabilization?
A) extra tax revenues are generated in a boom B) tax revenues remain constant during a recession C) leakages increase during a recession, helping to stimulate the economy D) Both A and C are correct.
A numeraire is
A) an average good. B) a tax levied on each consumer. C) a good used as a unit of account. D) an optimal bundle of goods.