In the short-run, a fall in demand results in _____ while in the long-run, a fall in demand results in ______
A. an increase in output and prices; a decline in output only
B. a fall in prices and an increase in output; no change in output or prices
C. a fall in prices only; and fall in output and prices
D. a fall in output and prices; a fall in prices only
Ans: D. a fall in output and prices; a fall in prices only
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The investment function intersects the saving schedule at an interest rate of 8 percent and a level of investment of $1.2 trillion a year. If the consumption curve intersects the 45-degree reference line at $3 trillion, then
A) the C + I curve will intersect the 45-degree reference line at $1.2 trillion. B) the C + I curve will intersect the 45-degree line at $1.8 trillion. C) the equilibrium level of real GDP is $1.8 trillion. D) the equilibrium level of real GDP is $4.2 trillion.
Which of the following is not a resource for a society?
a. capital goods, like factories and machine tools b. entrepreneurship c. legal institutions d. labor
Which of the following statements is false?
A) The exchange rate is the price of one (country's) currency in terms of another (country's) currency. B) A currency has appreciated in value if more of a foreign currency is needed to buy it. C) A change in the money supply can change aggregate demand. D) A change in business taxes can change investment, which can change aggregate demand. E) none of the above
Domestic law and order, the infrastructure, and the climate of international trade are all aspects of a country's:
A. natural resources endowment. B. human resources investment. C. capital investment. D. political environment.