Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. higher; potential
B. lower; higher
C. lower; potential
D. higher; higher
Answer: C
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When the value of one currency falls relative to another currency, the exchange rate for the first currency has
A) depreciated. B) appreciated. C) demanded. D) revalued.
Labor cost on an average accounts for about _____ percent of the total cost of production
a. 10 b. 30 c. 50 d. 70 e. 98
Which of the following policies could the Fed use to lower the interest rate?
a. A tax cut. b. Selling government securities. c. Raising the discount rate. d. Reducing the required reserve ratio.
An increase in the real interest rate will
a. increase the inflationary premium. b. decrease the inflationary premium. c. increase the price of current consumption relative to future consumption. d. decrease the price of current consumption relative to future consumption.