What is the difference between the short run and the long run when there is full employment and the government engages in deficit spending?
A. Real GDP will increase in the short run but not the long run.
B. Real GDP will increase in the long run but not the short run.
C. Real GDP will increase in both the short run and the long run.
D. Real GDP will not increase in either the long run or the short run.
Answer: A
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In the Keynesian model, a Federal Reserve sale of government securities in the open market will
a. raise the level of income and lower the interest rate. b. raise the level of income and raise the interest rate. c. lower the level of income and the interest rate. d. lower the level of income and raise the interest rate.
A decrease in the money supply causes the interest rate to rise so that investment falls
a. True b. False Indicate whether the statement is true or false
An oligopolist's production decision affects:
A. the prices charged by each firm. B. its profits. C. the profits of other firms in the market. D. All of these statements are true.
Obi-Wan is considering whether to buy a lightsaber. With probability 0.50 he will value the lightsaber at $4,000, and with probability 0.50 he will value it at $1,000. If new lightsabers sell for $2,500, then buying a new lightsaber is a:
A. fair gamble. B. less-than-fair gamble if Obi-Wan risk neutral. C. less-than-fair gamble. D. better-than-fair gamble.