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

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Definitions:

Syphilis

A sexually transmitted infection caused by the bacterium Treponema pallidum, presenting in various stages from sores to serious systemic symptoms.

Lyme Disease

An infectious disease caused by the Borrelia bacteria, transmitted to humans through the bite of infected black-legged ticks.

Spirilla

A genus of spiral-shaped bacteria, some of which are known to cause diseases in humans.

Viruses

Infectious agents that replicate only inside the living cells of an organism, which can cause a variety of diseases in humans, animals, and plants.