Which of the following fiscal policy actions would most likely cause a reduction in the size of an inflationary gap?
A. cuts in taxes
B. increases in taxes
C. cuts in taxes and increases in government spending
D. increases in government spending
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
nlike the European Union competition laws, Chinese Anti-monopoly Law considers which of the following?
A) charging unfairly high prices B) exclusive deals C) furthering the social interest D) tying contracts
An increase in consumer income will shift both the supply and demand curves.
Answer the following statement true (T) or false (F)
Political forces:
A. affect the price mechanism through cultural norms. B. affect the price mechanism through scarcity. C. do not affect the price mechanism. D. affect the price mechanism through the legal system.