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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Federal deposit insurance covers deposits up to $250,000, but as part of a doctrine called "too-big-to-fail" the FDIC sometimes ends up covering all deposits to avoid disrupting the financial system. When the FDIC does this, it uses the
A) "payoff" method. B) "purchase and assumption" method. C) "inequity" method. D) "Basel" method.
Stabilization policy often faces a trade-off between inflation and unemployment
a. True b. False Indicate whether the statement is true or false
If the nominal interest rate is 4 percent and expected inflation is 2.5 percent, then what is the expected real interest rate?
a. 1.6 percent b. 10 percent c. 6.5 percent d. 1.5 percent
Suppose the accompanying table describes the demand for a good produced by monopolist. PriceQuantity$101$92$83$74$65$56$47The total revenue from selling 6 units is ________, and the marginal revenue of selling the 6th unit is ________.
A. $24; $5 B. $30; $1 C. $5; 5 D. $30; 0