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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Aggregate demand determines output in the short run if prices are flexible
Indicate whether the statement is true or false
All of the following increase labor productivity except _________
A. the accumulation of skill and knowledge B. an increase in capital per hour of labor C. an increase in consumption D. the employment of a new technology
In a problem involving exchange, the contract curve shows
A) all exchanges that make both parties better off. B) the one exchange that makes both parties better off. C) all possible allocations of goods between both parties. D) all possible efficient allocations between both parties.
Full employment means that
What will be an ideal response?