A fall in the price of a firm's output
A) decreases the firm's demand for labor.
B) increases the firm's demand for labor.
C) decreases the firm's supply of labor.
D) increases the firm's supply of labor.
A
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
When we export goods to foreign countries, we
A) receive payments from the rest of the world. B) make payments to the rest of the world. C) increase our inflation rate. D) decrease our inflation rate.
Macroeconomists are interested in how consumers respond to changes in the market real interest rate because
A) interest rates are an important channel for the effects of monetary and fiscal policies. B) substitution effects and income effects net out in the aggregate. C) of the permanent income hypothesis. D) future income affects current consumption.
Suppose losses cause industry Z to contract, and as a result, the prices of inputs used intensively in the industry's production process fall. We know, as a result, that industry Z is: a. an increasing cost industry
b. a constant cost industry. c. a decreasing cost industry. d. experiencing diminishing returns.