【正文】 nary。 BC.expansionary。 CD.expansionary。 A85.Refer to the figure below. The current level of GDP in this economy is ______。 the potential level of GDP is ______. A.Y1。 Y1B.Y2。 Y2C.Y1。 Y2D.Y2。 Y186.Refer to the figure below. Longrun equilibrium in this economy: A.will be impossible to achieve.B.could occur if AD shifts upward to the right.C.could occur if AS shifts upward and to the left.D.will occur only if AD shifts downward to the left.87.The Great Recession was the result of:A.two negative demand shocks.B.a negative demand shock and a negative inflation shock.C.two positive inflation shocks.D.a negative demand shock and a positive inflation shock.88.The two negative demand shocks that caused the Great Recession were:A.declining housing prices and the 2008 financial panic.B.declining housing prices and declining stock prices.C.increasing oil prices and the 2008 financial panic.D.increasing oil prices and declining stock prices.89.The selfcorrecting property of the economy means that output gaps are eventually eliminated by:A.rising or falling prices.B.falling prices only.C.increasing or decreasing potential output.D.government policy.90.The fact that output gaps will not last indefinitely, but will be closed by rising or falling prices is the economy’s:A.shortrun equilibrium property.B.selfcorrecting property.C.ineexpenditure multiplier.D.longrun equilibrium property.91.The selfcorrecting tendency of the economy means that rising inflation eventually eliminates:A.expansionary gaps.B.recessionary gaps.C.exogenous spending.D.unemployment.92.The selfcorrecting tendency of the economy means that falling inflation eventually eliminates:A.expansionary gaps.B.recessionary gaps.C.exogenous spending.D.unemployment.93.To achieve longrun equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:A.increase.B.decrease.C.not change.D.either increase or decrease depending on the relative shifts of AD and AS.94.An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ______ in the inflation rate, leading to a(n) ______ in output.A.increase。 increaseB.increase。 decreaseC.decrease。 increaseD.decrease。 decrease95.Starting from longrun 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。 potentialB.expansionary。 lower。 potentialC.expansionary。 higher。 higherD.recessionary。 higher。 lower96.Starting from longrun equilibrium, a large decrease in government purchases will result in a(n) ______gap in the short run and ____inflation and ____output in the long run.A.expansionary。 higher。 potentialB.recessionary。 lower。 potentialC.expansionary。 higher。 higherD.recessionary。 higher。 potential97.Refer to the figure below. Suppose the economy is initially in equilibrium with output Y2 and inflation rate of π3. An increase in military spending will:A.shift AD from AD2 to AD1.B.shift AD from AD1 to AD2.C.shift AS from AS2 to AS1.D.shift AS from AS1 to AS2.98.Refer to the figure below. Suppose that the economy is initially in equilibrium with output Y2 and inflation rate of π3. An increase in military spending will generate:A.a recessionary gap.B.an expansionary gap.C.disinflation.D.hyperinflation.99.Refer to the figure below. Suppose the economy is in a shortrun equilibrium at output Y1 and inflation rate π2. The economy is currently experiencing ______, and the correct monetary policy response to this situation, to return the economy to potential GDP, is to ______.A.a recessionary gap。 raise taxesB.an expansionary gap。 cut taxesC.a recessionary gap。 increase the money supplyD.an expansionary gap。 decrease the money supply100.Refer to the figure below. Suppose the economy is in a shortrun equilibrium at output Y3 and inflation rate π2. The economy is currently experiencing ______, and the correct monetary policy response to this situation, to return the economy to potential GDP, is to ______.A.a recessionary gap。 raise taxesB.an expansionary gap。 cut taxesC.a recessionary gap。 increase the money supplyD.an expansionary gap。 decrease the money supply101.Refer to the figure below. Suppose the economy is in a shortrun equilibrium at output Y1 and inflation rate π2. The economy is currently experiencing ______, and the correct fiscal policy response to this situation, to return the economy to potential GDP, is to ______.A.a recessionary gap。 increase government spendingB.an expansionary gap。 decrease government spendingC.a recessionary gap。 increase taxesD.an expansionary gap。 decrease taxes102.Refer to the figure below. Suppose the economy is in a shortrun equilibrium at output Y3 and inflation rate π2. The economy is currently experiencing ______, and the correct fiscal policy response to this situation, to return the economy to potential GDP, is to ______.A.a recessionary gap。 increase government spendingB.an expansionary gap。 decrease government spendingC.a recessionary gap。 increase taxesD.an expansionary gap。 decrease taxesChapter 13 Key1.The economy is in longrun equilibrium:A.when the AD and AS curves inte