Solved

Starting from Long-Run Equilibrium, a Large Increase in Government Purchases

Question 113

Multiple Choice

Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.


A) expansionary; higher; potential
B) expansionary; higher; higher
C) recessionary; lower; lower
D) recessionary; higher; potential

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Q108: Higher rates of inflation reduce planned spending

Q109: Starting from long-run equilibrium, a favorable inflation

Q110: The self-correcting tendency of the economy means

Q111: Inflation inertia is the tendency for inflation

Q112: The tendency for inflation to change relatively

Q114: The aggregate demand curve shifts to the

Q115: Refer to the given figure. <img src="https://d2lvgg3v3hfg70.cloudfront.net/TB6547/.jpg"

Q116: Starting from long-run equilibrium, the long-run impact(s)of

Q117: An upward shift in the Fed's reaction

Q118: The economy pictured in the given figure