Starting from a long-run equilibrium, an increase in government expenditures increases output in the short run but not in the long run.
Answer the following statement true (T) or false (F)
True
In the short run, firms adjust quantity rather than price, so output rises. In the long run, prices adjust and output returns to its potential.
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Why does growth occur in two-sector growth models?
What will be an ideal response?
Substitutes are pairs of products with
a. positive cross-price elasticity of demand b. negative cross-price elasticity of demand c. positive income elasticity of demand d. negative income elasticity of demand e. positive price elasticity of demand
Backorders occur when you do not have inventory in stock and your customer . . . ?
a. Switches to a different brand. b. Decides to keep their business with your organization and wait for the desired product. c. Cancels the order because she decides she has enough inventory all ready. d. Decides to take her future business elsewhere. e. Either A or D
A natural monopoly exists when:
A. several formerly competing producers merge to become the only firm in an industry. B. unit costs are minimized by having one firm produce an industry's entire output. C. minimum efficient scale is attained at a small level of output. D. short-run average total cost curves are tangent to long-run average total cost curves.