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
You might also like to view...
To maximize profit, the monopolist produces on the ________ portion of its demand where ________
A) elastic; P = MC B) elastic; MR = MC C) inelastic; P = MC D) inelastic; MR = MC
Economics
When the absolute price elasticity of demand is greater than 1, demand is
A) elastic. B) unit-elastic. C) inelastic. D) undetermined without more information.
Economics