Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential
B. expansionary; lower; potential
C. expansionary; higher; potential
D. recessionary; lower; lower
Answer: A
Economics
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If the income elasticity of demand is 0.5, the good is
a. a luxury. b. a normal good (but not a luxury). c. an inferior good. d. a Giffen good.
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Explain and show graphically how an increase in government spending affects the equilibrium interest rate in the market for loanable funds
What will be an ideal response?
Economics