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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At the end of the future period, in the real intertemporal model with investment
A) the firm's capital becomes useless and is thrown away. B) the firm's capital is used to produce more capital for the distant future. C) the firm can convert capital one-for-one into consumption goods. D) the firm's capital is converted into labor.
Identify the correct statement
a. During a recession, investment decreases while consumption increases. b. During a recession, investment increases while consumption decreases. c. During a recession, investment is constant while consumption increases. d. Annual variations in investment are larger than annual variations in consumption. e. Annual variations in investment are smaller than annual variations in consumption.
People are forced to make choices because of
a. unlimited wants and unlimited resources b. limited wants and unlimited resources c. unlimited wants and limited resources d. limited wants and limited resources e. limited resources are greater than unlimited resources
A decision by a government to sell businesses that currently are operated by the government to private investors is an example of ________ policy.
A. monetary B. aggregation C. structural D. fiscal