Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. higher; potential
D. lower; higher
Answer: A
You might also like to view...
Price equals the minimum of long-run average cost
A) in a long-run equilibrium. B) in a short-run equilibrium as well as in a long-run equilibrium. C) whenever average revenue equals marginal cost. D) along a horizontal long-run supply curve, but not along an upward sloping long-run supply curve.
If the writer of an option, holds shares of the stock or an actual quantity of the commodity when she writes the call option on it, her position is said to be:
a. protected. b. exposed. c. covered. d. naked.
When prices rise, consumers and businesses hold larger money balances. This reduces the supply of loanable funds, increases the interest rate, and discourages both consumption and investment. This process is called the
a. interest rate effect. b. real balance effect. c. investment effect. d. disinvestment effect.
If demand in a perfectly competitive market decreases, supply will:
A. decrease in the short run. B. increase in the short run. C. increase in the long run. D. not change in the short run.