In the long-run ISLM model and with everything else held constant, the long-run effect of an autonomous increase in investment is to ________ real output and ________ the interest rate
A) increase; increase
B) increase; not change
C) not change; increase
D) not change; decrease
C
You might also like to view...
What was the consequence of the United States putting an anti-dumping tax on flat panel displays?
a. It created a trade war with other countries. b. It protected buyers from paying a low price for flat panels display. c. It increased employment in the United States. d. It drove the laptop manufacturing industry out of the United States.
Countries with more economic freedom have levels of economic growth that
a. are generally higher than those of nations with less economic freedom. b. are similar to those of nations with less economic freedom since the level of investment, not economic freedom, determines the growth rate. c. cannot continue at high levels because too little government planning is being done. d. are generally lower than the growth rates of countries with less economic freedom.
Over time, continued budget deficits lead to
a. a higher capital stock and higher productivity. b. a higher capital stock and lower productivity. c. a lower capital stock and higher productivity. d. a lower capital stock and lower productivity.
Government-imposed quantity restrictions
A) generate a higher price for the good than would prevail under freely competitive markets. B) generate a lower price for the good than would prevail under freely competitive markets. C) does not affect the price of the good because quantity restrictions always ban sale of the good completely. D) can cause prices to either be higher or lower, but always cause excess quantities supplied to develop.