Contractionary fiscal policy to prevent real GDP from rising above potential real GDP would cause the inflation rate to be ________ and real GDP to be ________

A) higher; higher
B) higher; lower
C) lower; higher
D) lower; lower


Answer: D

Economics

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Which of the following is the best example of a short-run adjustment?

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The federal income tax _____________ compared to a state sales tax.

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A study of what manufacturers thought their average total cost curves look like revealed that most

a. believe their ATC is downward sloping b. believe their ATC is horizontal c. believe their ATC is upward sloping d. believe their ATC is U-shaped e. do not know what their ATC looks like

Economics