Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. higher; potential
D. lower; higher
Answer: A
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Suppose that the total production of an economy consists of 10 oranges and 5 candy bars, each orange sells for $0.20, and each candy bar sells for $1.00. What is the market value of production in this economy?
A. $7.00 B. $1.20 C. $2.00 D. $5.00
Refer to Figure 4-7. The figure above represents the market for iced tea. Assume that this is a competitive market. If the price of iced tea is $3, what changes in the market would result in an economically efficient output?
A) The quantity supplied would decrease, the quantity demanded would increase, and the equilibrium price would decrease. B) The price would decrease, quantity demanded would increase, and quantity supplied would decrease. C) The price would decrease, the quantity supplied would increase, and the quantity demanded would decrease. D) The price would decrease, the demand would increase, and the supply would decrease.
When the economy enters a recession, your employer is unlikely to reduce your wages because ________ during a recession
A) output and input prices generally fall B) output prices always fall C) output prices generally fall and input prices generally rise D) lower wages increase your incentive to find employment elsewhere.
Scientists prefer to advance irrefutable theories, rather than refutable theories
Indicate whether the statement is true or false