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 real business cycle theory emphasizes that in today's modern age, ________ technology plays a significant role in causing economic fluctuations
A) obsolete ideas in B) advances in C) shocks to D) duplications in
An increase in the U.S. price level (foreign prices held constant) will cause a leftward shift in the aggregate demand curve.
Answer the following statement true (T) or false (F)
As one moves down a straight-line demand curve, the elasticity increases.
Answer the following statement true (T) or false (F)
Unanticipated positive inflation
A. benefits banks. B. hurts debtors. C. hurts everyone. D. hurts creditors.