Explain what factors cause changes in output in: (1 ) the short run; (2 ) medium run; and (3 ) long run
What will be an ideal response?
In the short run, demand factors primarily cause changes in output. In the medium run, factors such as the technology, amount of capital, and the skill and size of the labor force (supply factors) affect output. And in the long run, the education system, saving rate, and role of government affect economic activity.
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If the consumption function is C = 90 + 0.75y, then the level of autonomous consumption is
A) 0.25. B) 0.75. C) 67.5. D) 90.
Which multilateral institution serves as the lender of last resort?
What will be an ideal response?
Refer to Figure 13.1. All else equal, if the economy is in a recession, expansionary fiscal policy would result in a movement from
A) point A to point B. B) point B to point A. C) point B to point C. D) point C to point B.
A tariff is better than a quota because
A. it does not distort trade as much. B. quotas are inflexible. C. tariffs produce tax revenue. D. quotas hurt domestic producers; tariffs hurt foreign producers.