Suppose the economy is producing at the natural rate of output. An increase in consumer and business confidence will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant
A) an increase; an increase
B) a decrease; a decrease
C) no change; an increase
D) no change; a decrease
C
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An open economy is one in which exports and imports constitute a large share of GDP.
Answer the following statement true (T) or false (F)
For a market with a linear demand curve and constant marginal cost of production, why are the reaction functions for the Cournot duopoly sellers also straight lines?
A) The reaction functions do not have to be straight lines, and they are only drawn this way in the book to keep the figures simple. B) Cournot thought the lines would be straight, but this was proven wrong by other economists. C) Marginal revenue is always linear when marginal costs are constant. D) We know that the marginal revenue curves for linear demand curves are also straight lines.
In the above figure, what is the quantity of workers that would be hired in a perfectly competitive market?
A) Q1 B) Q2 C) Q3 D) Q4
The aggregate supply curve is downward sloping because buyers tend to purchase more of all goods and services as the price level decreases
a. True b. False Indicate whether the statement is true or false