To economists, the main difference between the short run and the long run is that:
A. fixed costs are more important to decision making in the long run than they are in the short run.
B. the law of diminishing returns applies in the long run, but not in the short run.
C. in the long run all resources are variable, while in the short run at least one resource is fixed.
D. in the short run all resources are fixed, while in the long run all resources are variable.
Answer: C
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The main determinant of how quickly expected inflation adjusts to changes in monetary policy is
A) the slope of the Phillips curve. B) the slope of the short-run aggregate supply curve. C) the credibility of the central bank. D) the degree of indexation in the economy.
The measure of saving in the National Income and Product Accounts includes
A) capital gains on stocks, bonds, houses, and other assets. B) purchases of consumer durables. C) nominal interest payments which households receive from corporations. D) all of the above.
If interest rates increase to a very high level, people will most likely hold
A. more money in savings accounts and more cash. B. less money in savings accounts and more cash. C. less money in savings accounts and less cash. D. more money in savings accounts and less cash.
Consider estimating the effect of the beer tax on the fatality rate, using time and state fixed effect for the Northeast Region of the United States (Maine, Vermont, New Hampshire, Massachusetts, Connecticut and Rhode Island) for the period 1991-2001
If Beer Tax was the only explanatory variable, how many coefficients would you need to estimate, excluding the constant? A) 18 B) 17 C) 7 D) 11