Starting from long-run equilibrium, a decrease in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. higher; potential
D. lower; higher
Answer: A
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Discuss the correct and incorrect economic analysis in the following statement
"The United Auto Workers Union has successfully negotiated a 9 percent increase in wages for its workers. This increase in the wage rate causes an increase in demand for automobiles, since many consumers now have greater incomes, and also a decrease in the supply of automobiles because the cost of production has increased. These effects cancel each other out resulting in no change in equilibrium price and quantity in the automobile market."
A natural monopoly results when a firm has
a. a license b. a patent c. official approval to produce a product d. decreasing average costs over the range of market demand e. exclusive use of a natural resource
Federal tax dollars can be spent only if
A. Congress passes a law and overrides a veto. B. Congress passes a law that the President signs. C. Congress passes a law that the President signs and overrides a veto. D. Congress passes a law and fails to override the veto.
If a British student pays her way to attend Harvard University, her action will:
A) cause the exchange rate of the British pound to rise. B) cause the exchange rate of the U.S. dollar to fall. C) change the supply of dollars in the foreign currency market. D) change the supply of pounds in the foreign currency market.