Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
You might also like to view...
Refer to Table 2-1. Which of the following would be a mutually agreeable rate of exchange?
A) 1F = 1C B) 1F = 2C C) 1F = 3C D) No exchange rate would be mutually agreeable.
Suppose an individual buys a new CD of her favorite musical artist. This purchase has taken place in the
A) labor markets. B) factor markets. C) resource markets. D) product markets.
A decrease in the price level results in a(n) ________ in household consumption spending and a(n) ________ in investment spending
A) increase; increase B) decrease; increase C) increase; decrease D) decrease; decrease
A permanent shift in the foreign exchange market supply and demand curves such that the fixed exchange rate is no longer an equilibrium rate is referred to as:
a. permanent devaluation. b. speculative disequilibrium. c. permanent revaluation. d. speculative equilibrium. e. fundamental disequilibrium.