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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An increase in the level of real GDP in the economy leads to
A) a leftward shift in the demand for money curve. B) a rightward shift in the demand for money curve. C) a leftward movement along the demand for money curve. D) a rightward movement along the demand for money curve.
If a firm faces an average total cost of $100 and sells its product for $115, how much profit does it make when it sells 20 units of the product?
A) $200 B) $115 C) $300 D) $800
The passage of the Smoot-Hawley Tariff in 1930 sparker a trade war that caused net exports to ___ and real GDP to ___
Fill in the blank(s) with the appropriate word(s).
The U.S. current account deficit improved slightly from 2007 to 2010 because
A) spending on imports fell due to an overall fall in consumption. B) state, local, and federal government budget deficits increased. C) worldwide economic growth spurred U.S. exports. D) capital controls restricted capital inflow.