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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What are Properties of Money?
??Exhibit 16A-2 Macro AD/AS Models
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As shown in Panel (a) of Exhibit 16A-2, assume the economy adopts a classical nonintervention policy. Which of the following would cause the economy to self-correct?
A. ?Competition among firms for workers increases the nominal wage and SRAS shifts rightward. B. ?Long-run equilibrium will be established at Y1 and P2. C. ?Long-run equilibrium will be established at Y1 and P3. D. ?Competition among unemployed workers decreases nominal wages and SRAS shifts rightward.
Rather than go out to eat by yourself, you decide to stay at home and fix dinner for yourself and your two roommates. Your roommates applaud your decision
Your roommates tell you that your decision to eat at home has no opportunity cost because you already have all the dinner ingredients in your pantry. Is this comment correct?
Which of the following would shift the aggregate demand curve to the right?
a. An increase in government purchases b. An increase in investment spending c. An open market purchase of bonds by the Fed d. All of the above e. None of the above