Starting from long-run equilibrium, the long-run impact of an increase in autonomous investment, compared to the original equilibrium, is:
A. higher inflation and higher output.
B. lower inflation and lower output.
C. lower inflation and the same output.
D. higher inflation and the same output.
Answer: D
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Use the figure below to answer the following question.
A decrease in supply would best be reflected by a change from
A. point 3 to point 4. B. point 5 to point 6. C. point 2 to point 1. D. point 5 to point 1.
What is the criticism leveled against deposit insurance by the FDIC?
An increase in the MRP for each unit of labor
A. means that the marginal physical product of labor rose. B. means that more labor is demanded by the firm. C. means that the demand for the final product has fallen. D. means that labor's productivity has risen.
A monopolistic competitive firm is inefficient because the firm:
A. earns positive economic profit in the long run. B. is producing at an output corresponding to the condition that marginal cost equals price. C. is not maximizing its profit. D. produces an output where average total cost is not minimum.