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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Professional baseball teams in the United States use only wooden bats. If aluminum bats were permitted, the likely result would be a
A. shift in the supply curve for aluminum bats. B. shift in the supply curve for wooden bats. C. change in the quantity supplied of aluminum bats. D. persistent shortage of aluminum bats.
Pick the true statement, regarding the notion of competition as a process versus the model of perfect competition
A) The process notion allows for full and complete information; perfect competition doesn't. B) The process notion allows for price taking activity; perfect competition doesn't. C) The process notion allows for identical products; perfect competition doesn't. D) The process notion allows for a small number of participants; perfect competition doesn't. E) All of the above are true.
The main purpose of antitrust law is to
A) prohibit monopoly practices such as restricting output. B) regulate advertising. C) encourage the formation of cartels. D) regulate the stock and bond markets.
If a firm must pay for goods it has ordered with foreign currency, it can hedge its foreign exchange-rate risk by ________ foreign exchange futures ________
A) selling; short B) buying; long C) buying; short D) selling; long