Pure economic rent is a payment to a resource that
A. has a perfectly inelastic supply.
B. has a negative opportunity cost.
C. has a perfectly elastic demand.
D. has a high opportunity cost.
Answer: A
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
An increase in the demand for loanable funds, other things constant, will increase the interest rate
a. True b. False Indicate whether the statement is true or false
If the Fed wants to decrease the money supply, it can __________ the required reserve ratio, conduct an open market __________, or __________ the discount rate
A) raise; purchase; lower B) lower; purchase; lower C) raise; sale; raise D) lower; sale; lower E) none of the above
Which of the above diagrams illustrate(s) the effect of an increase in incomes on the market for secondhand clothing?
A. A only B. B only C. C only D. B and C