The long run is a period of:
A. at least one year.
B. sufficient length to allow a firm to expand output by hiring additional workers.
C. sufficient length to allow a firm to alter its plant size and capacity and all other factors of production.
D. sufficient length to allow a firm to transform economic losses into economic profits by hiring better workers.
Answer: C
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The incentive for analysts in investment banks to distort research increases when
A) revenues from brokerage commissions increase. B) the potential revenues from underwriting greatly exceed brokerage commissions. C) the potential brokerage commissions greatly exceed revenues from underwriting. D) revenues from underwriting decrease.
Assume that the Fed knows a demand shock has occurred in the economy. It takes the Fed 2 months to adjust policy to the shock, and it takes the economy 14 months for the policy change to affect the economy
The 2 month time period refers to the ________, and the following 14 month time period refers to the ________. A) policy lag; implementation lag B) recognition lag; implementation lag C) implementation lag; impact lag D) policy lag; recognition lag
If demand is inelastic
A) then a 1% increase in price leads to a fall in quantity of greater than 1%. B) then a 1% increase in price leads to a fall in quantity of less than 1%. C) then a 1% increase in price leads to a fall in quantity of 1%. D) then a 1% increase in price leads to a rise in quantity of less than 1%.
A $100 billion increase in government spending increases Real GDP by $900 billion. Assuming a constant price level, what does the government spending multiplier equal?
A) 9 B) 900 C) 800 D) 8 E) 7