Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Suppose that a non-discriminating monopolist lowers its price from $75 to $70 in order to sell more output. Marginal revenue will
a. equal $75 b. equal $70 c. be between $75 and $70 d. be less than $70 e. be greater than $75
The long-run equilibrium price level is the price level the economy is expected to reach when the
a. economy produces its potential output b. Fed has stabilized interest rates c. federal budget is balanced d. discount rate equals the prime rate e. inflation rate is zero
If 1 U.S. dollar exchanges for 7.89 South African rand, how much would it cost in rand to purchase a Dell P.C. priced at $795?
What will be an ideal response?
Contrast the Keynesian and Monetarist views on how a change in the money supply impacts the economy.
What will be an ideal response?