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
Answer: A
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The M1 measure of the money supply equals
A) currency plus checking account balances plus traveler's checks plus savings account balances. B) currency plus checking account balances plus traveler's checks. C) currency plus checking account balances. D) paper money plus coins in circulation.
If a bank has excess reserves of $15,000 and demand deposit liabilities of $80,000, and if the reserve requirement is 20 percent, then the bank has total reserves of
A) $11,000. B) $21,000. C) $31,000. D) $41,000.
If we sum the private marginal cost curves of firms producing nuclear power, we create the
a. industry supply curve for nuclear power b. market equilibrium for nuclear power c. total value of the negative externalities generated by nuclear power d. optimal allocation of resources associated with nuclear power e. marginal externality cost curve for nuclear power
The law of one price means that prices eventually will be the same in all countries and eventually countries will not have a reason to trade.
Answer the following statement true (T) or false (F)