Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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If marginal utility declines but remains positive, then
A) total utility continues to increase but at a decreasing rate. B) total utility also declines. C) total utility continues to be zero. D) none of the above.
Suppose the dollar-euro exchange rate falls. Then
A. the dollar is less valuable relative to the euro. B. French firms will import more from the United States into France. C. U.S. firms will export less to France. D. the euro is more valuable relative to the dollar.
If in the short run the demand for mass transit is inelastic and in the long run the demand is elastic, then a price:
A. Increase will decrease total revenue in the short run but increase total revenue in the long run B. Increase will increase total revenue in the short run but decrease total revenue in the long run C. Decrease will increase total revenue in the short run but decrease total revenue in the long run D. Decrease will decrease total revenue in the short run and decrease total revenue in the long run
A move from G to H represents
A. an increase in quantity demanded.
B. a decrease in quantity demanded.
C. an increase in demand.
D. a decrease in demand.