Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower
Answer: C
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Stagflation can be explained by a
a. shift in the short run Phillips curve to the left. b. shift in the short run Phillips curve to the right. c. a movement along the short run Phillips curve to the right. d. a movement along the short run Phillips curve to the left.
The graph shown portrays a subsidy to buyers. Before the subsidy is put in place, the producers sold _____ units and received _____ for each of them.
A. 100; $46
B. 100; $30
C. 150; $40
D. 150; $24
In the short run, a perfectly competitive firm will always shut down if, at all output levels above zero,
a. price is less than average total cost b. total revenue is less than total cost c. they cannot pay variable costs with total revenue d. variable cost is greater than fixed cost e. price is less than fixed cost
In a typical economy, the dollar value of the total output for a period will equal the sum of consumption spending, planned investment spending, government spending, and net tax revenue
a. True b. False