Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. lower; higher
D. higher; potential
Answer: D
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If V is constant and Y is fixed, any change in M
A) leads to a smaller change in P. B) leads to a proportionate change in P. C) leads to a larger change in P. D) does not lead to change in P.
The first economist to systematically analyze market failure was
A) Adam Smith. B) J. E. Meade. C) Ronald Coase. D) A. C. Pigou.
Which of the following statements correctly defines the law of demand?
a. The lower the price of a commodity, the lower the quantity demanded of that commodity. b. As the price of a commodity increases, the quantity demanded of that commodity also increases. c. The lower the price of a commodity, the greater the quantity demanded of that commodity. d. The lower the price of a commodity, the greater the quantity supplied of that commodity. e. The quantity demanded of a particular good decreases with an increase in the price of a substitute good.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and current international transactions in the context of the Three-Sector-Model?
a. There is not enough information to determine what happens to these two macroeconomic variables. b. The real risk-free interest rate falls, and current international transactions become more positive (or less positive). c. The real risk-free interest rate rises, and current international transactions remain the same. d. The real risk-free interest rate rises, and current international transactions become more positive (or less negative). e. The real risk-free interest rate and current international transactions remain the same.