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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The problem of scarcity
A. applies to market-based economies. B. applies to centrally planned economies. C. applies only to the economies of less-developed countries. D. applies to all of these economies, not just one type.
A fixed exchange rate system where central banks buy and sell gold to keep exchange rates at a given level is called the:
A) fixed standard. B) flexible standard. C) fiat standard. D) gold standard.
As price declines, quantity supplied
A. rises. B. falls. C. remains the same.
Apartment dwellers near Wrigley Field in Chicago are often able to watch the Chicago Cubs baseball team play from the roof of their apartment building, without having to pay the cost of buying a ticket. This is an example of a:
a. marginal social cost. b. negative externality. c. positive externality. d. deadweight loss.