Suppose the economy was initially in a long-run equilibrium. Then the world economy expands so that foreign incomes rise. U.S. aggregate demand ________ and eventually the money wage rate ________
A) increases; rises
B) increases; falls
C) decreases; rises
D) decreases; falls
A
You might also like to view...
The major difference between short-term macroeconomic theory and long-run macroeconomic theory is:
a. Short-term theory focuses mainly on demand-oriented factors, and long-run theory focuses mainly on supply-oriented factors. b. Short-term theory focuses mainly on supply-oriented factors, and long-run theory focuses mainly on demand-oriented factors. c. Short-term theory focuses mainly on financial markets, and long-run theory focuses mainly on the real goods market and the foreign exchange market. d. Short-term focuses mainly on the real goods market and foreign exchange market, and long-run theory focuses mainly on the financial markets. e. Short-term theory focuses mainly on the role government has in an economy, and long-run theory focuses mainly on the role financial and real markets have on the real goods market.
If a firm is a price taker, it operates in a
a. competitive market. b. monopoly market. c. oligopoly market. d. monopolistically competitive market.
For the past 30 years, labor's share of national income ________ while labor productivity ________
A) fell dramatically, increased B) remained roughly constant, dropped C) remained roughly constant, increased D) increased modestly, dropped
The steeper is the IS curve,
A) the more effective is monetary policy. B) the less effective is monetary policy. C) the effectiveness of monetary policy does not change. D) a given change in the money supply will have a greater effect on output.