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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Monopoly pricing reduces consumer surplus.
Answer the following statement true (T) or false (F)
Expansionary fiscal policy when the economy is below full employment _______ aggregate demand and real GDP, and the price level _________.
Fill in the blank(s) with the appropriate word(s).
The J curve shows that
A. devaluation is likely to be unsustainable. B. devaluation is more likely to improve the trade balance in the short run than in the long run. C. devaluation is more likely to improve the trade balance after a longer span of time has elapsed. D. devaluation is unlikely to improve the trade balance in either the short run or the long run.
Public policy responses to monopolies:
A. aim to break up existing monopolies. B. prevent new monopolies from forming. C. ease the effect of monopoly power on consumers. D. All of these statements are true.