Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. lower; higher
D. higher; potential
Answer: D
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Assuming an decrease in money demand, then to keep interest rates constant the Fed must
a. keep the money supply constant. b. conduct an open market sale of bonds. c. reduce the required ratio. d. both b and c. e. None of the above
If farmers begin using better fertilizers to grow corn, we would expect a(n) __________ in the supply of corn.
a) small decrease b) no change c) large decrease d) increase
Goods are ________ when the income elasticity of demand is positive
A) complements B) elastic C) inferior D) substitutes E) normal
The "fair results" view of fairness says that a minimum wage law set above the equilibrium wage rate is unfair because the minimum wage
A) does not apply to all workers. B) boosts the income of highly skilled workers. C) benefits only those workers who are able to find and keep a job. D) benefits nobody. E) cannot be enforced.