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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Which of the following constrain (that is, limit) a firm's profits? I. its technology II. its information III. the market in which it operates
A) I only B) I and II C) II and III D) I, II and III
What reason do economists believe that megabanks are forming?
A) Megabanks enable economies of scale in information processing which allows them to better serve their customers. B) Megabanks create economies of scale which allow the banks to make riskier investment and increase profits. C) Megabanks can compensate for their economies of scale by diversifying into many countries. D) Megabanks allow investors more opportunities and have continued to grow by using their economies of scale to overwhelm their competition.
In a particular year, if the price level rises by 4 percent and the nominal wage of workers rises by 6 percent, we can conclude that the real wage has: a. fallen by 2 percent
b. fallen by 10 percent. c. increased by 2 percent. d. increased by 10 percent. e. remained constant.
Which of the following statements about modern macroeconomic theory is most accurate?
a. Keynes' ideas help us understand movements in output around its long-run trend, while the Classical model is more useful in explaining the long-run trend itself. b. The classical model helps us understand movements in output around its long-run trend, while the short-run macro model is more useful in explaining the long-run trend itself. c. Both classical and short-run macro models help us understand movements in output around its long-run trend, but neither model is effective at explaining the long-run trend itself. d. Neither the classical nor the short-run macro model helps us understand movements in output around its long-run trend, but both are useful in explaining the long-run trend itself. e. Only the short-run macro model is useful in understanding movements in output around its long-run trend, and in explaining the long-run trend itself.