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 price of a bag of pretzels rises from $2 to $3 and the quantity demanded decreases from 100 to 60. What is the price elasticity of demand?
A) 1.0 B) 1.25 C) 40.0 D) 20.0 E) 0.80
A Cobb-Douglas production function is
A) a production function for the textile industry. B) a particular production function that fits the data well. C) a production function applicable in the service industry. D) the production function that Henry Ford applied in his firm.
What differentiates a savings deposit from a small-denomination certificate of deposit (CD)?
A. A savings deposit cannot be withdrawn before its maturity date without incurring a penalty; funds in a CD are available at any time with no interest penalty. B. A CD has a fixed maturity date; a savings deposit can be withdrawn at any time. C. All depository institutions accept savings deposits, whereas only a thrift institution can issue a CD. D. Only a savings deposit is a time deposit.
Refer to the information provided in Figure 19.1 below to answer the question(s) that follow. 
Figure 19.1 Refer to Figure 19.1. The workers? share of the tax burden is
A. $0. B. $2,100. C. $700. D. $1,400.