In which zone will small shifts in AD, either to the right or the left, affect the output level, but will not much affect the price level?
a. Keynesian
b. Neoclassical
c. Intermediate
d. Equilibrium
a. Keynesian
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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
All of the following are government purchases except
A) the salary paid to Senator John Cornyn of Texas. B) the presidential pension paid to former President George H.W. Bush. C) the purchase of a new office building for the CIA. D) the purchase of new radar tracking equipment for the Navy.
Over the past 70 years in the United States, employment in service-producing industries had increased significantly and employment in goods-producing industries has declined significantly. Economists would refer to this process as
A) the classical dichotomy. B) production parity. C) demographic imbalance. D) sectoral shifts.
The market system is able to allocate resources efficiently because individuals have the right to the output they produce and _____
a. freedom of the press b. freedom of speech c. freedom of movement d. freedom of exchange