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
Economics
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Decisions regarding purchases and sales of government securities by the Fed are made by the:
a. Federal Deposit Insurance Commission (FDIC). b. Discount Committee (DC). c. Federal Open Market Committee (FOMC). d. Federal Funds Committee (FFC).
Economics
How does the shape of the aggregate supply curve affect macroeconomic analysis and policymaking? Illustrate your answer with the appropriate graphs.
What will be an ideal response?
Economics