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
Answer: B
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If Brazil imposes a 50% tariff on automobiles and a 25% tariff on motors, the effective rate of protection on autos is
A) higher than the nominal rate of protection on autos. B) need more information to answer. C) lower than the nominal rate of protection on autos. D) equal to the nominal rate of protection on autos.
What's true about both the short-run and long-run in terms of production and cost analysis?
a. In the short-run, one or more of the resources are fixed b. In the long-run, all the factors are variable c. The time horizon determines whether or not an input variable is fixed or not d. The law of diminishing returns is based in part on some factors of production being fixed, as they are in the short run. e. All of the above
The main components of spending, which can cause changes in aggregate demand, are: a. consumption, investment, government purchases, and net exports
b. consumption, investment, government purchases, and imports. c. investment, savings, replacement of depreciated equipment, and spending. d. consumption, savings, government purchases, and exports.
A monopolist determines the profit-maximizing output
A) at the point at which TR = TC. B) at the point at which MR = MC. C) at any point it wants because it is the only producer of the product. D) at the point at which TR is maximum.