Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower
Answer: C
You might also like to view...
Using a toll to reduce traffic when congestion is greatest is an example of a
a. regulation solution. b. command-and-control policy. c. corrective tax. d. Coase theorem solution.
A defining characteristic of an oligopoly is:
A. barriers to entry prevent newcomers to such an industry. B. easy entry and exit prevent long-run profits from being possible. C. firms in the industry know they are competing with a few large firms with market power. D. all firms sell a standardized product.
According to the model of the macro economy in Figure 18.3, a shift from LRAS1 to LRAS2 will cause, ceteris paribus,
A. A decrease in the level of output. B. An increase in the unemployment level. C. An increase in government spending. D. A decrease in the price level.
Which antitrust act provided that injured parties could file suit and, if successful, collect triple damages from monopolistic violators?
A. Wheeler-Lea Act B. Clayton Act C. Sherman Act D. Celler-Kefauver Act