Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
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Which of the following influences people's buying plans and does not shift the demand curve?
A) the price of the good B) the prices of related goods C) income D) preferences
The demand for a product at a given time is defined as the
a. desire for it. b. sum spent on it. c. measure of total utility for it. d. amount that would be bought at various prices.
An insurance company requires homeowners it insures to have smoke detectors in their homes. The insurance company is trying to combat the
A. adverse selection problem. B. the free-rider effect. C. moral hazard problem. D. "lemons" problem. E. none of the above
Experience with the Phillips curve since the 1970s has shown that the:
a. curve can be used as a reliable model to guide public policy. b. relationship between the inflation rate and the unemployment rate moves in a clockwise direction. c. curve is not stable. d. inflation rate and the unemployment rate are equal.