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 marginal benefit of an activity is i. the benefit from a one-unit increase in the activity. ii. the benefit of a small, unimportant activity. iii. measured by what the person is willing to give up to get one additional unit of the activity
A) i only B) ii only C) iii only D) i and iii E) ii and iii
As the price of DVD players has fallen over the last two years, more DVD players have been sold by consumer electronics firms. Is this a violation of the law of supply?
For a monopolist, the quantity effect:
A. is the decrease in revenues from selling a greater quantity at a lower price. B. is the increase in revenues from selling a greater quantity at a lower price. C. is always outweighed by the price effect. D. always outweighs the price effect.
The 5 basic macroeconomic outcomes
What will be an ideal response?