In the long run, an increase in the aggregate price level:
A. doesn't change real output.
B. decreases real output.
C. increases real output.
D. increases spending.
A. doesn't change real output.
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Real domestic interest rates would increase in a large open economy if
A) there were a temporary negative domestic supply shock. B) the government imposed capital controls and the capital and financial account had been in deficit. C) foreigners were more willing to save. D) there were a temporary negative supply shock abroad in a small open economy.
Economist Edward Prescott is associated with the
A) early spread of the old Keynesian approach. B) creation of the "fooling" model. C) creation of the first "New Classical" approach. D) creation of the "real business cycle" model.
Consider a firm that operates in a perfectly competitive market. Currently the firm is producing 50 units of output and at that output level, marginal revenue is $6 . Suppose that the firm increases output by 50%. Total revenue will be a. $300
b. $450. c. $600. d. the same since price will fall by 50%.
Other things the same, when the interest rate rises
What will be an ideal response?