Refer to the following table that gives the demand facing a monopolist: 
How much does the 28th unit of output add to total revenue?
A. $200
B. $10
C. $2
D. $20
E. none of the above
Answer: B
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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
Relative to the yen, from 2012-2014 the U.S. dollar
A) depreciated due to an anticipated decrease in the interest rate differential and expectations of a lower future exchange rate. B) appreciated due to an anticipated decrease in the interest rate differential and expectations of a lower future exchange rate. C) depreciated due to an anticipated increase in the interest rate differential and expectations of a higher future exchange rate. D) appreciated due to an anticipated increase in the interest rate differential and expectations of a higher future exchange rate.
If the tax multiplier is -1.5 and a $200 billion tax increase is implemented, what is the change in GDP, holding everything else constant? (Assume the price level stays constant.)
A) a $133.33 billion increase in GDP B) a $133.33 billion decrease in GDP C) a $30 billion increase in GDP D) a $300 billion decrease in GDP E) a $300 billion increase in GDP
Assume the economy is initially in equilibrium with real GDP equal to potential GDP. Other things equal, if the economy enters a recession, automatic stabilizers
A) reduce the magnitude of the multiplier and reduce the size of the decline in real GDP. B) reduce the decline in investment expenditures and therefore increase the real short-term interest rate. C) cause any decrease in real GDP to be offset by an equal decrease in the inflation rate. D) raise the interest rate to prevent the output gap from falling below equilibrium.