Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher
B. expansionary; higher; potential
C. recessionary; higher; potential
D. recessionary; lower; lower
Answer: B
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Use the following table to answer the question below. Jake's Production Possibilities ScheduleJane's Production Possibilities SchedulePounds of Green BeansPounds of CornPounds of Green BeansPounds of Corn01600801012020602080404030406020400800Without trade Jake consumes 20 pounds of green beans and 80 pounds of corn, and Jane consumes 40 pounds of green beans and 40 pounds of corn. If the terms of trade are 1 pound of green beans for 3 pounds of corn, and Jake sells Jane 72 pounds of corn, then the gains from trade for Jane are ________ pounds of green beans and ________ pounds of corn with trade and specialization.
A. 32, 16 B. 8, 4 C. 16, 32 D. 4, 8
Given a constant rate of growth of real GDP, what would lead to an increasing real GDP per capita?
a. a rate of population growth that is less than the rate of growth of real GDP b. a rate of population growth that is greater than the rate of growth of real GDP c. an increase in the size of the labor force d. an increase in the capital stock
If the price of hamburger rises, we would expect the demand for steak to shift to the right
a. True b. False Indicate whether the statement is true or false
The passage of new legislation that imposes much less government regulation of business will most likely:
a. Increase aggregate demand b. Decrease aggregate supply c. Decrease aggregate demand d. Increase aggregate supply