According to the real business cycle model,
A) increases in aggregate demand do not affect GDP.
B) increases in aggregate demand lower the price level.
C) increases in aggregate demand lower GDP.
D) increases in aggregate demand raise GDP.
A
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Private markets are most likely to produce goods that are
a. neither rival nor excludable b. rival, but not excludable c. socially desirable, regardless of whether they are rival or not d. both rival and excludable e. rival, but not profitable
In the long run, a monopolistically competitive firm:
a. will earn normal profits. b. will earn excess profits. c. will earn no profits. d. will produce where marginal cost equals price.
The long-run price elasticity of demand is usually larger than the short-run price elasticity of demand because:
A. demand curves tend to become steeper over time. B. economists take the absolute value of long-run price elasticities but not of short-run elasticities. C. people have more time to find substitute goods. D. incomes tend to rise over time.
Higher marginal tax rates for welfare programs will
A. Increase the number of people eligible for welfare. B. Decrease the incentive to work. C. Increase total welfare costs. D. Decrease the moral hazard associated with welfare.