Suppose the economy is in long-run equilibrium. Senator A succeeds in getting taxes lowered. At the same time, Senator B succeeds in getting major restrictions on logging enacted. In the short run
a) real GDP will fall and the price level might rise, fall, or stay the same.
b) the price level will fall, and real GDP might rise, fall, or stay the same.
c) real GDP will rise and the price level might rise, fall, or stay the same.
d) the price level will rise, and real GDP might rise, fall, or stay the same.
Ans: d) the price level will rise, and real GDP might rise, fall, or stay the same.
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Which of the following tends to reduce bank failures as the result of bank runs by depositors?
a. The Federal Deposit Insurance Corporation b. The Federal Open Market Operations Committee c. The comptroller of the currency d. The Senate Banking Committee
In order to avoid congressional action in the United States, in the early 1980s the Japanese resorted to:
a. infant industry protection. b. dumping of automobiles. c. voluntary export restraint (VER). d. price discrimination.
Which of the following situations may lead to a decrease in the level of cyclical unemployment?
A. Total value of goods supplied exceeds total value of goods demanded. B. Undesired inventory accumulation. C. A period of significant inflation. D. Desired saving exceeds desired investment.
Which statement is true?
A. Over time demand tends to become less elastic. B. The demand for cigarettes is very elastic. C. Advertisers try to make the demand for their products less elastic. D. None of these statements are true.