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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Suppose that the technology used to produce computers advances. How does this change affect the supply of computers and the supply curve of computers?
What will be an ideal response?
The linkages of the interest-rate-based transmission mechanism of monetary policy are summarized as follows:
A) change in the money supply ? change in speculative balances ? change in transactions balances ? change in planned investment ? change in aggregate demand. B) change in the money supply ? change in planned investment ? change in government spending ? change in aggregate demand. C) change in the money supply ? change in interest rates ? change in planned investment ? change in aggregate demand. D) change in the money supply ? change in interest rates ? change in transactions balances ? change in government spending ? change in aggregate demand.
If an established domestic industry is in jeopardy of being displaced by lower-priced imports, there could be a rationale for
a. permanent import restrictions to prevent the decline of the domestic industry b. temporary import restrictions to allow the orderly adjustment of the domestic industry c. permanent import restrictions based on the infant industry argument d. temporary import restrictions based on the infant industry argument e. temporary import restrictions that will be replaced by permanent tax breaks for the domestic industry
Which among the following is the primary cause of hyperinflation?
a. decreased government purchases b. excessive money growth c. high interest rates d. high levels of taxation