What will be the result in a growing economy if increases in aggregate demand outpace rightward shifts of the long-run aggregate supply curve?
A) secular deflation
B) inflation accompanied by declines in real GDP
C) inflation accompanied by increases in real GDP
D) a decline in consumption spending
Ans: C) inflation accompanied by increases in real GDP
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Which of the following is a limitation of discretionary fiscal policy? i. lawmaking lags ii. estimating potential GDP iii. income gap
A) i only B) ii only C) iii only D) i and ii E) i, ii, and iii
During the course of an economic contraction, it is likely that a country would experience
A) a currency depreciation as explained by the absorption approach. B) a currency appreciation as explained by the absorption approach. C) a currency depreciation as explained by the elasticities approach. D) a currency appreciation as explained by the elasticities approach.
William J. Clinton (1993–2001) was the first U.S. president since the Great Depression to increase taxes to try to reduce the federal budget deficit
Indicate whether the statement is true or false
Table 9.1 represents 3 markets for used computers. Which of the markets in Table 9.1 are in equilibrium?
A. 1 only B. 2 only C. 3 only D. 2 and 3