At a short-run equilibrium ________, while at a long-run equilibrium ________.

A. the inflation rate is stable; there is an output gap
B. output equals potential output; the inflation rate is stable
C. there is an output gap; output equals potential output
D. output is at a level consistent with inflation; there is an output gap

Answer: C

Economics

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If the production possibilities frontier between bottled water and water in a jug is a straight line, which of the following statements would be correct?

A) Resources are equally productive at producing either product. B) There is no decrease in the production of one good when the production of the other is increased. C) There is no tradeoff between the two goods. D) A large amount of unemployment must exist. E) Producing more of one good gives the economy a free lunch.

Economics

A problem with using fiscal policy to fine-tune the economy is that

A) agreeing on the appropriate fiscal policy is time consuming. B) fiscal policy impacts the economy too fast. C) fiscal policy impacts only urban areas of the nation. D) fiscal policy impacts only the largest states in the nation.

Economics