Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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What will be an ideal response?
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In a competitive labor market, if the demand for labor increases, labor demand will shift to the:
A. left and wages will decrease. B. left and wages will increase. C. right and wages will decrease. D. right and wages will increase.
Without any regulation, the natural monopolist will
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