Refer to the accompanying figure.
An economy in short-run equilibrium at point A has a(n) ________ gap. The gap could be eliminated by the self-correcting mechanism of the economy and eventually achieve long-run equilibrium at point ________ or the central bank could intervene with monetary easing establishing the long-run equilibrium at point ________.
A. recessionary; C; B
B. expansionary; C; B
C. expansionary; B; C
D. recessionary; B; C
Answer: A
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Given a Cobb-Douglas production function estimate of Q = 1.19L.72K.18 for a given industry, this industry would have:
a. increasing returns to scale b. constant returns to scale c. decreasing returns to scale d. negative returns to scale e. none of the above
Suppose that the demand for medical services can be characterized by the equation X = 500 - P/3. Suppose further that the supply of health services can be characterized by the equation X = P - 100.
(a) What is the equilibrium quantity and price in the market for health services? (b) In an effort to make health services more affordable, the government restricts the price of health services to be no greater than $250. What will happen to the quantity of health services in the market?
________ fixed the exchange rates of Germany, France, Italy, the Netherlands, Belgium, Denmark, Ireland, and Luxembourg beginning in 1979.
A. A currency board B. The International Monetary Fund C. The European Central Bank D. The Exchange Rate Mechanism
Investment returns:
A. are always positive. B. are only received when an asset is sold. C. are only received when there is stream of multiple payments generated by the asset. D. can be received either through the sale of an asset or as a stream of payments.