Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential
B. expansionary; lower; potential
C. expansionary; higher; potential
D. recessionary; lower; lower
Answer: A
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The distribution of world income is
a. equalizing rapidly. b. very unequal. c. very equal for countries in the Northern Hemisphere. d. very equal for countries in Europe.
Which of the following will NOT shift an economy's production possibilities curve outward?
A. an increase in technology B. an improvement in the literacy rate C. a reduction in the unemployment rate D. an increase in the number of workers available
Suppose the price of a package of guitar strings is $5. If Mark's marginal cost of producing that package of guitar strings is $3, his producer surplus from that package of guitar strings is:
A. $0. B. $1. C. $2. D. $3.
The above figure is referred to as a(n)
A) trade-off curve. B) opportunity curve. C) production possibilities curve. D) scarcity-shortage curve.