Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential
B. expansionary; higher; potential
C. recessionary; lower; potential
D. recessionary; lower; lower
Answer: C
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In the financial futures quotations, the total number of long positions outstanding is called
A) settlements. B) market activity. C) open interest. D) arbitrage.
A production function for which proportional changes in all inputs leads to a more-than-proportional change in output is said to exhibit
A. constant returns to scale. B. diminishing returns. C. decreasing returns to scale. D. increasing returns to scale.
The more money firms spend on R&D the faster the economy is expected to grow.
Answer the following statement true (T) or false (F)
Suppose that in the market for paper, demand is p = 100 - Q. The private marginal cost is MCp = 10 + Q. Pollution generated during the production process creates external marginal harm equal to MCe = Q. Is social welfare greater under monopoly or under competition?
What will be an ideal response?