Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower
Answer: C
You might also like to view...
The model of aggregate demand and aggregate supply is nothing more than a large version of the model of market demand and market supply
a. True b. False Indicate whether the statement is true or false
Frank is purchasing products C and D in utility-maximizing amounts. If the price of C is $4 and the price of D is $2, then:
A. the marginal utility of D is twice that of C. B. the marginal utility of D is the same as that of C. C. the marginal utility of C is twice that of D. D. the marginal utility of C is four times that of D.
The interest parity condition indicates that the domestic interest rate must be equal to
A) the foreign interest rate. B) the expected rate of depreciation of the domestic currency. C) the expected rate of appreciation of the domestic currency. D) the foreign interest rate minus the expected rate of appreciation of the foreign currency. E) none of the above
Refer to the information provided in Scenario 22.5 below to answer the question(s) that follow.SCENARIO 22.5: The tiny nation of Bugaboo consists of two virtually identical islands, Achoo and Zoink, separated by the Strait of Dingo. The islands are similar in geography and population. The only telephone service on the islands is cellular, and the only cellular provider on the islands is the government-owned Bugaboo Communications Company, which charges a standardized rate of 20 Bugabucks per minute. Both islands add on an additional $5 Bugabucks-per-minute usage tax. As a way to increase revenue, the island governor of Zoink decided to increase the usage tax to $10 per minute, effective January 1, 2017. The average monthly cellphone usage per month is listed in the table below.?Average
Monthly Telephone Use per Resident (minutes)Island20162017Achoo4,5005,150Zoink4,8005,225Refer to Scenario 22.5. The total cost of telephone service for residents of Achoo in 2016 is ________ Bugabucks. A. 4,500 B. 22,500 C. 90,000 D. 112,500