If the economy in the graph shown were at point B, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase government spending.
B. increase income tax.
C. decrease tax credits.
D. All of these would move the economy to its potential GDP from point B.
A. increase government spending.
You might also like to view...
According to Simon Kuznets, _____
a. the main force behind economic growth is increases in the quantity of labor b. the main force behind economic growth is increases in the quantity of capital c. the main force behind economic growth is increases in the quality of inputs d. government regulations increase labor productivity e. government regulations decrease labor productivity
Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as 
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting upward C. Short-run aggregate supply shifting downward D. Aggregate demand shifting leftward
In order to analyze migration in the long run, it is appropriate to use:
a. the specificfactors model with free movement of labor across borders. b. the HeckscherOhlin model with free movement of labor across borders. c. the Ricardian model with no movement of labor across borders. d. the PPF modified for three goods, three factors of production (all fixed), and three nations.
To calculate market demand, we
A. Add the quantities demanded for each individual demand schedule vertically. B. Find the difference between the quantity demanded and the quantity supplied at each price. C. Find the average quantity demanded at each price. D. Add the quantities demanded for each individual demand schedule horizontally.