Question

Which of the following conditions describes a recessionary gap? a. The short-run equilibrium level of real GDP is above the long-run level of real GDP. b. The short-run equilibrium level of GDP is below the long-run level of real GDP. c. The actual interest rate is above the equilibrium interest rate. d. The actual interest rate is below the equilibrium interest rate. 2. One part of the supply-side argument is that: a. Lower marginal tax rates are required to induce Congress to reduce government spending. b. Lower marginal tax rates should be set at 50 percent. c. Lower marginal tax rates can increase total tax revenues. d. The relevant aggregate supply curve is close to horizontal. 3. The period between the recognition of a problem and the implementation of a policy to solve the problem is: a. Recognition lag. b. The action time lag. c. The effect time lag. d. The fine-tuning lag.

          Which of the following conditions describes a recessionary gap?
    a. The short-run equilibrium level of real GDP is above the long-run level of real GDP.
    b. The short-run equilibrium level of GDP is below the long-run level of real GDP.
    c. The actual interest rate is above the equilibrium interest rate.
    d. The actual interest rate is below the equilibrium interest rate.
    
    2. One part of the supply-side argument is that:
    a. Lower marginal tax rates are required to induce Congress to reduce government spending.
    b. Lower marginal tax rates should be set at 50 percent.
    c. Lower marginal tax rates can increase total tax revenues.
    d. The relevant aggregate supply curve is close to horizontal.
    
    3. The period between the recognition of a problem and the implementation of a policy to solve the problem is:
    a. Recognition lag.
    b. The action time lag.
    c. The effect time lag.
    d. The fine-tuning lag.

Added by Jill G.

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