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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A possible reconciliation of the Leontief Paradox is that the United States has high tariffs on capital intensive goods and low tariffs on labor intensive goods
Indicate whether the statement is true or false
Which of the following did NOT significantly exacerbate the banking crisis of the early 1930s?
A) the Fed's decision not to make loans to insolvent banks B) the large number of small, poorly diversified banks C) the large number of rural banks that held agricultural loans during a time of falling commodity prices D) the large amount of fraud carried out by bank managers
The impact of an increase in the gasoline tax on SUV sales is
A) a macroeconomics topic because it deals with taxes. B) a microeconomics topic because it deals with one industry. C) not an economic issue, but rather a political issue. D) insignificant.
Excess reserves are put to use by a bank when it
A. puts cash in the vault to back existing loans. B. pays off the mortgage on its building. C. sells government securities. D. makes loans to its customers.