Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Most of the empirical research on long-run costs suggests that the long-run average cost curve for most firms has a very pronounced U-shape
Indicate whether the statement is true or false
If a bank has $50 million in rate-sensitive assets and $20 million in rate-sensitive liabilities then
A) an increase in interest rates will reduce bank profits. B) a decrease in interest rates will reduce bank profits. C) interest rate changes will not impact bank profits. D) a decrease in interest rates will increase bank profits.
The FOMC finally moved to ________ on January 25, 2012, when it issued its "Statement on Long-Run Goals and Monetary Policy Strategy."
A) inflation targeting B) zero inflation policy C) "just do it" policy D) monetary targeting
The way to prevent the national debt from growing is for the budget not to be in deficit
a. True b. False Indicate whether the statement is true or false