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

Economics

You might also like to view...

U.S. workers will be attracted to otherwise undesirable work as long as:

A. The compensating wage differential is high enough B. The compensating wage differential is low enough C. There are not enough illegal immigrants to fill all of the available jobs D. There are laws that restrict illegal immigrants from working in the U.S.

Economics

In 1961, real GDP totaled $575 billion and in 2011 it totaled $1,255 billion. Between 1961 and 2011, the population increased from 50 million to 100 million. Between 1961 and 2011, the standard of living based on real GDP per person

A) decreased from $125,500 to $28,750. B) increased by about 118 percent. C) increased from $11,500 to $12,550. D) decreased by 9 percent. E) increased by over 300 percent.

Economics

In a Dutch auction, ________ with each bid

A) the price of the good increases B) the price of the good decreases C) the quantity of the good being offered increases D) the quantity of the good being offered decreases

Economics

The deflation of the 1930s impacted the U.S. economy because it led some consumers to ________ and because it ________

A) demand higher wages in anticipation of prices eventually rising again; increased manufacturing since firms could afford to hire more labor B) increase purchases to take advantage of the falling prices; increased the burden on lenders C) postpone purchases while they waited for prices to fall even lower; increased the burden on borrowers D) borrow more money since money was now cheap; reduced the amount of money consumers would have to pay back on their outstanding loans

Economics