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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The figure above represents the production possibilities frontier for a country. a) The nation is currently producing at point B and wants to move to point C
What is the opportunity cost of the move? b) The nation is currently producing at point B and wants to move to point A. What is the opportunity cost of the move?
Monetarists believe that discretionary monetary policy, and not discretionary fiscal policy, should be used to correct disequilibrium
a. True b. False Indicate whether the statement is true or false
Which of the following factors would not shift the demand curve for loanable funds?
a. a decrease in the marginal physical product of capital b. an increase in the marginal physical product of capital c. a decrease in the price of the good produced by capital d. an increase in the price of the good produced by capital e. an increase in the interest rate
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The marginal rate of transformation in moving from Point A to Point B is
A. -2/3. B. -1.5. C. -3. D. -30.