Refer to Figure 16-7. Given that the economy has moved from A to B in the graph above, which of the following would be the appropriate fiscal policy to achieve potential GDP?
A) decrease interest rates B) increase government spending
C) contractionary fiscal policy D) increase taxes
B
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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
It has been observed in country X that with an increase in college enrollment over a period of six years, the demand for televisions has also increased
Would it be right to conclude that the increase in college enrollment has caused the increase in demand for televisions? Why or why not?
Which of the followings does NOT shift the short-run aggregate supply curve?
A) supply shocks. B) persistent positive output gap. C) changes in expected inflation. D) an increase in output gap.
There is virtually no difference between
A. primary reserves and secondary reserves. B. secondary reserves and required reserves. C. required reserves and primary reserves.