Potential output:
A. is purely a physical phenomenon.
B. requires the purchase of new equipment.
C. is related to the long-term growth trend.
D. requires government expenditures.
Answer: C
Economics
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The reduction of a tax
a. could increase tax revenue if the tax had been extremely high b. will always reduce tax revenue regardless of the prior size of the tax c. will have no impact on tax revenue d. causes a market to become less efficient
Economics
If aggregate demand and aggregate supply both shift left, we can be sure that the price level is higher in the short run.
a. true b. false
Economics