Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. lower; higher
D. higher; potential
Answer: D
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Suppose transactions costs are created by a principal-agent problem. If the objective is economic efficiency, who should be made liable for damages resulting from the interaction of the principal and the agent?
a. The principal should be liable for all damages. b. The agent should be liable for all damages. c. Liability for damages should be equally split between the principal and the agent. d. The assignment of liability is irrelevant according to the Coase Theorem.
Statistical studies of the relationship between interest rates and later depreciation rates show that
A) the interest difference has been a very bad predictor in the large swings of exchange rates. B) the interest difference has been an accurate predictor in the large swings of exchange rates. C) the interest difference has correctly predicted the direction in which exchange rates would change. D) the interest difference has not yet been studied as a predictor in the large swings of exchange rates. E) the interest difference is unrelated to the large swings of exchange rates.
Which of the following producers likely faces the most significant barrier to entry in its industry due to government regulation?
a. toy manufacturer b. pharmaceutical firm c. glass manufacturer d. soap producer
Are saving accounts money?
A. No, because counting saving accounts as money would double-count that money. B. No, because they technically can't be used to buy goods and services. C. Yes, because they can be used to buy goods and services. D. Yes, even though they technically can't be used to buy goods and services.