Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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An increase in the rate of economic growth curve could be caused by all of the following except
A. a national tax that encourages all employers to provide more training and education for employees which leads to an across-the-board upgrade of the skill level of the nation's workforce. B. a movement along the production possibilities curve so that the society produces more consumer goods and less capital goods. C. an increase in immigration that increases the country's labor force by 20 percent. D. an increase in research and development spending for space technology that improves the quality of the nation's capital stock.
Improved quality in health care services is partly responsible for increases in health care costs in the United States
Indicate whether the statement is true or false
Four stores have a problem with theft and security is a public good. Let S stand for the number of person-hours of security patrols per week. The marginal benefit of security patrols to each of the stores is given by the formula MB = 200/(1 + S). Patrols cost $25 per hour. Which of the following gives the marginal social benefit function?
A. MSB = 50/(1 + S) B. MSB = 4 + [200/(1 + S)] C. MSB = 800/(1 + S) D. MSB = [200/(1 + S)] - 4
Retired persons are officially classified as:
a. unemployed. b. self-employed. c. underemployed. d. not in the labor force.