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
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A) 2500 B) 2100 C) 1500 D) 800
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A. that poorer countries will grow faster than rich ones. B. all countries eventually will experience the same rate of growth. C. countries may have the same rate of growth but differing levels of income. D. All of these are true.
Pricing insurance policies is made difficult because buyers have more information than sellers. This difficulty is an example of
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