In macroeconomics, the long run refers to:
A. how long it takes for prices of inputs to fully adjust to changes in economic conditions.
B. the time period when sticky wages are in place.
C. how long it takes for output decisions to adjust to changes in economic conditions.
D. how long it takes for fixed inputs to become variable.
A. how long it takes for prices of inputs to fully adjust to changes in economic conditions.
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When actual output exceeds potential output, there is ________ output gap and the inflation rate will ________.
A. an expansionary; be lower than the expected rate of inflation B. no; be equal to the expected rate of inflation C. an expansionary; exceed the expected rate of inflation D. a recessionary; exceed the expected rate of inflation
Using a graph, show the effects of a weaker dollar on the economy. Explain
What will be an ideal response?
A two-player game has an equilibrium outcome
a. only if both players have dominant strategies b. if neither player has a dominant strategy c. whenever one player has a dominant strategy d. only with tit-for-tat strategy e. only with repeated trials
Suppose that there are two types of houses for sale: those with solid foundations and those with cracked foundations. In all other respects, the two types of houses are identical. Houses with solid foundations are worth $200,000, while those with cracked foundations are worth $200,000 minus the $20,000 to fix the crack, or $180,000. Sellers know which type of house they have, but buyers cannot detect whether the foundation has a crack. Suppose that 80 percent of the houses for sale have a solid foundation and 20 percent of the houses for sale have a cracked foundation. In the long run, we would expect:
A. 80 percent of the houses for sale to have a solid foundation, 20 percent to have a cracked foundation, and houses to sell for $196,000. B. 100 percent of the houses for sale to have a cracked foundation and to sell for more than $180,000. C. 100 percent of the houses for sale to have a solid foundation and to sell for $200,000. D. 100 percent of the houses for sale to have a cracked foundation and to sell for $180,000.