Refer to Figure 16-1. Suppose the economy is in short-run equilibrium below potential GDP and Congress and the president lower taxes to move the economy back to long-run equilibrium. Using the static AD-AS model in the figure above, this would be depicted as a movement from
A) A to B.
B) C to B.
C) A to E.
D) B to A.
E) B to C.
A
Economics
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A White House proposal to lower business taxes by increasing tax deductions is an example of
A) progressive taxation. B) contractionary fiscal policy. C) automatic stabilization. D) expansionary fiscal policy.
Economics
A firm could continue to operate for years without ever earning a profit as long as it is producing an output where
A) ATC > AVC. B) AFC < AVC. C) MR > AVC. D) MR < ATC.
Economics