Assume an economy is operating on its production possibilities curve, which shows the production of military and civilian goods. If the output of military goods is increased, the output of civilian goods:

A reduction in tax rates may result in a short-term reduction in government revenues, but it will also leave people with more disposable income.

a. true b. false

On average, in the recessions since 1950, it has taken ________ for real GDP to return to its cyclical peak

A) about 6 months B) about 1 year C) about 18 months D) almost 2.5 years