If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to
A) increase real Gross Domestic Product (GDP).
B) increase the price level.
C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag.
D) decrease both real Gross Domestic Product (GDP) and the price level.
B
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Government policies that are used to affect aggregate expenditure, with the objective of eliminating output gaps, are called ________ policies.
A. stabilization B. productivity C. cyclical D. structural
As the housing bubble collapsed, and the value of homes decreased, consumers’ loss of wealth led to:
A. decreased consumption, which increased prices, which increased the costs of production, leading to more job loss. B. decreased consumption, which further depressed prices, which reduced output further, leading to more job loss. C. increased consumption, which increased prices, which increased the costs of production, leading to more job loss. D. decreased consumption, which further depressed prices, which decreased the amount people had to spend, and increased savings.
A firm's cost of production is affected by changes in
A. the available technology. B. input prices. C. profits. D. both a and b E. both b and c
For a monopoly, the value of the next worker equals
A) MR ? MPL. B) (price + the effect of increased output on price) ? MPL. C) P(1 + 1/e) ? MPL D) All of the above.