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
You might also like to view...
Which of the following is true about specific performance?
a. It is an amount paid by a breaching party to the suffering party to cover the latter's loss. b. It arises in situations which involve written promises. c. It is usually ordered by the court when the economic value of the transaction is difficult to quantify. d. It is common in case of contracts having a negative influence on the society as a whole.
Many states have usury laws, which:
a. impose an upper limit on the interest rate that lenders can charge. b. impose a lower limit on the interest rate that lenders can charge. c. impose limits on how products can be used by consumers. d. impose an upper limit on the quantity of a product that can be sold.
According to the textbook, L. Frank Baum, the author of The Wonderful Wizard of Oz, blamed ____________________ for the economic depression of 1893 and the related hardships faced by farmers and workers
A) the gold standard B) the silver standard C) a massive tornado D) high taxes
Which of the following is the best example of a network externality?
A. The Internet B. Parks C. Pollution D. Museums