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 credit demand curve is:
A) vertical. B) downward sloping. C) horizontal. D) upward sloping.
If a good has an external benefit, efficiency can be achieved by
A) leaving the market unregulated. B) monopolizing the market. C) offering a private subsidy on the good equal to the external benefit. D) imposing a tax on the good equal to the external benefit.
Firms with union contracts do a large portion of the painting jobs in the county. If the painters' union wins a 12 percent wage increase, what will most likely happen in the non-unionized part of the painters' labor market? a. Nonunion painters will also get 12 percent wage increases
b. There will be no change in the nonunionized part of the painters' labor market because these sectors are not connected. c. Wage rates in the nonunion sector are likely to fall. d. Many nonunion painters will likely find work for a firm with a union contract.
The steel industry is an example of a homogeneous oligopoly.
Answer the following statement true (T) or false (F)