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
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When the economy is in the liquidity trap, the
A) LM curve is horizontal. B) LM curve is vertical. C) IS curve is horizontal. D) IS curve is vertical.
Refer to Figure 9.8. In order to eliminate international trade in sugar altogether, this country would have to impose a quota of
A) 0 tons. B) 200 tons. C) 300 tons. D) 350 tons. E) 500 tons.
The output effect of a change in the wage rate on a firm's demand for labor input will be greater:
a. the larger the share of labor costs in total costs and the greater the price elasticity of demand for output. b. the larger the share of labor costs in total costs and the smaller the price elasticity of demand for output. c. the larger the share of labor costs in total costs and the higher the quantity demanded. d. the smaller the possibilities of substituting capital for labor.
Which of the following is not true about the demand for factors of production?
A. It is a function of diminishing marginal physical product. B. It depends on the firm's expected sales and output. C. It is derived from the demand for the goods and services the firm produces. D. It is a function of the elasticity of supply.