Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher
B. higher; potential
C. lower; higher
D. lower; potential
Answer: B
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A decrease in the price level results in a(n) ________ in household consumption spending and a(n) ________ in investment spending
A) increase; increase B) decrease; increase C) increase; decrease D) decrease; decrease
Which of the following statements regarding patents is false?
A) Patents can help firms gain market power through innovation and then act as a barrier to entry. B) A firm that has market power as a result of a patent may be more likely to innovate than a perfectly competitive firm. C) Patents encourage the production of information, which might otherwise be under supplied. D) Patents can last for an indefinite time period.
The rate of inflation, excluding the effects of food and energy prices, is _____.
(A) Hyperinflation (B) The core inflation rate (C) The price index (D) The wage-price spiral
If the economy is in a recession, the structural deficit should equal the cyclical deficit.
Answer the following statement true (T) or false (F)