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
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In the above figure, the farmer faces a trade-off between beans and wheat equal to
A) one-to-one. B) three-to-one. C) one-to-two. D) one-to-four.
Each seller of a product is willing to sell as long as the price he or she can receive is greater than the opportunity cost of producing the product
a. True b. False Indicate whether the statement is true or false
The price mechanism deals _____ with the issue of an equitable income distribution and ____ with the issue of efficiency.
A. well; well B. poorly; poorly C. well; poorly D. poorly; well
What is the glue that holds modern economics together?
A. The invisible hand theorem B. The supply and demand model C. Modeling D. The economic decision rule