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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In order to increase the capital stock, society must divert ________ that could be otherwise used to increase the supply of ________.
A. money; labor. B. money; consumer goods C. credit; labor D. resources; consumer goods
A price elasticity of demand of -0.67 implies
a. Demand is inelastic b. Demand is elastic c. Demand is unitary elastic d. Demand is perfectly elastic
Measured as a share of GDP, the net federal debt
a. increased during the 1990s, but fell sharply during 2001-2011. b. fell during most of the 1990s, but rose sharply during 2001-2011. c. was virtually unchanged during the 1990s, but fell sharply during 2001-2011. d. fell during the 1990s, but was virtually unchanged during 2001-2011.
Which of the following helps to reduce frictional unemployment?
a. government-run employment agencies b. public training programs c. the Internet d. All of the above are correct.