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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For normal goods, the substitution effect and the income effect work in ________, generating a(n) ________-sloped demand curve.
A. opposite directions; downward B. the same direction; downward C. opposite directions; upward D. the same; upward
The 1980s were characterized by ________ monetary policy and ________ fiscal policy
A) tight; easy B) tight; tight C) easy; easy D) easy; tight
Given the production function q = 1.37LK, what is the marginal product of labor?
A) 1.37 B) 0 C) 1.37K D) Cannot be determined with the information given.
Which of the following most accurately describes an impact of the Navigation Acts?
a. Wages of Southern plantation owners increased. b. Wages of New England sailors increased. c. Wages of wheat farmers in the Middle Colonies increased.