In the long run, a decrease in government spending, other things equal, generates
A. a higher real GDP in the short run.
B. both a higher real GDP and a lower price level.
C. a lower real GDP in the long run.
D. a lower price level.
Answer: D
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A common feature of regulated industries is cross-subsidization, which is a situation when one group of customers pays prices above costs while another group of customers pays prices below costs. The one group is subsidizing the other group
Is this practice more consistent with the capture hypothesis or the share-the-gains, share-the-pains theory? Explain.
Mary is a homemaker while husband Jack works at the warehouse. The minimum salary Mary would take for a market-related job is $15,000 . She is offered a job at the office next to the warehouse for $25,000 . which she takes. Mary receives
a. $10,000 in differential rent b. $25,000 in wage-related rent c. $15,000 in wage-related rent d. $15,000 in differential rent e. $10,000 in wage-related rent
If market incentives to produce are too strong, the market will end up producing:
A) too much of the good. B) too little ofthe good. C) a quantity equal to the efficient outcome, as market incentives can never be considered too strong. D) zero output
A tax on suppliers will cause the equilibrium price paid by the consumer to ________ and the equilibrium quantity to ________.
A. increase, increase B. decrease, decrease C. increase, decrease D. decrease, increase