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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The figure above shows the demand curve, marginal revenue curve, and marginal cost curve. The deadweight loss when the market has a monopoly producer is
A) ace. B) abf. C) bcd. D) bcef. E) acd.
If uncertainty about banks' health causes depositors to begin to withdraw their funds from banks, the country experiences a(n)
A) banking crisis. B) financial recovery. C) reduction of the adverse selection and moral hazard problems. D) increase in information available to investors.
Most of the Fed's earnings come from
A) fees charged to financial institutions for check clearing. B) interest on the securities it holds. C) interest on discount loans. D) congressional appropriations.
In real business cycle theory, the persistence of shocks to total factor productivity is justified by
A) the fact that some capital depreciates every period. B) the behavior of Solow residuals. C) the fact that Taylor rules have been used in post-war United States. D) the fact that capital takes some time to build.