Starting from Long-Run Equilibrium, a Large Tax Increase Will Result

question 56

Multiple Choice

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

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

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Definitions:

Global Expansion

The process of a business extending its operations or influence beyond its original national boundaries.

Organizational Objectives

Goals or targets that an organization aims to achieve over a specific period.

Changing Environment

Refers to the dynamic and often unpredictable shifts within the external conditions impacting an organization, requiring adaptability and strategic planning.

Global Economy

Describes an interconnected world economy where goods, services, and labor move across national borders with relatively few restrictions, influenced by global events and market trends.