Suppose the economy is in long-run equilibrium. If there is a sharp decline in government purchases combined with a significant increase in immigration of skilled workers, then in the short run,
a. real GDP will rise and the price level might rise, fall, or stay the same. In the long-run, real GDP will rise and the price level might rise, fall, or stay the same.
b. the price level will fall, and real GDP might rise, fall, or stay the same. In the long-run, real GDP and the price level will be unaffected.
c. the price level will rise, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise and the price level will fall.
d. the price level will fall, and real GDP might rise, fall, or stay the same. In the long run, real GDP will rise and the price level will fall.
d
You might also like to view...
Demand-pull inflation occurs
A) when the aggregate supply curve shifts to the right, while aggregate demand remains stable. B) when the aggregate demand curve shifts to the right, while aggregate supply remains stable. C) when the aggregate demand curve shifts to the left, while aggregate supply remains stable. D) when the aggregate supply curve shifts to the left, while aggregate demand remains stable.
Why are increasing returns to scale and fixed costs important in models of international trade and imperfect competition?
What will be an ideal response?
The nation, as a whole, is hurt by inflation if it:
a. Is expected. b. Reduces productivity. c. Changes consumers' preferences for durable versus non-durable goods. d. Rises at a rate that is greater than real GDP. e. All the above are true.
Which of the following market structures results in a deadweight loss in the long run?
a. Perfect competition and monopolistic competition b. Monopolistic competition and monopoly c. Perfect competition and monopoly d. All of these market structures lead to a deadweight loss in the long run