If demand pull inflation occurs when the economy is already at potential GDP, then following the initial increase in aggregate demand, the
A) AS curve shifts rightward.
B) potential GDP line shifts rightward.
C) AS curve shifts leftward.
D) potential GDP line shifts leftward.
E) None of the above is correct because demand-pull inflation shifts only the aggregate demand curve.
C
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The reason why cleanup costs are lower for a taxes approach than for a direct controls approach is that
a. all firms reduce pollution equally and fairly. b. firms that are able to clean up at lowest cost do so; others don't. c. large polluters clean up the most, which is always lowest cost. d. small polluters clean up the most, which is generally the cheapest.
Compared to other industrial nations, inflation rates in the United States are:
A. significantly higher. B. significantly lower. C. significantly higher than those in Europe and significantly lower than those in Japan. D. neither significantly higher nor significantly lower.
The three main categories of government outlays are
A. government consumption expenditures, government investment, and transfer payments. B. net government subsidies, the government deficit, and government purchases. C. government purchases, transfer payments, and net interest payments. D. net interest payments, government investment, and government consumption expenditures.