Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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Other things being equal, appreciation of the dollar
A) increases aggregate demand in the United States, and may decrease aggregate supply by reducing the prices of imported resources. B) increases aggregate demand in the United States, and may increase aggregate supply by reducing the prices of imported resources. C) decreases aggregate demand in the United States, and may decrease aggregate supply by increasing the prices of imported resources. D) decreases aggregate demand in the United States, and may increase aggregate supply by reducing the prices of imported resources.
The people of the Island of Yap used stones as a general medium of exchange. Therefore,
A) their economic system was based upon barter. B) their stones served as money. C) they had no price system, because prices can't be measured with stones. D) inflation was impossible.
An unexpected fall in the Purchasing Managers' Index should send bond prices __________ and stock prices __________
A) up; up B) up; down C) down; up D) down; down
The disagreement value in a nonstrategic game is most closely related to
a. opportunity costs b. fixed costs c. total profit d. accounting costs