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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The interest rate effect that helps explain the slope of the aggregate demand curve arises because
A) an increase in the price level lead to decreases in interest rates, which induces more borrowing and hence raises planned real expenditures. B) interest rates and total planned real expenditures are unrelated. C) an increase in the price level boosts interest rates, which discourages borrowing and hence reduces planned real expenditures. D) a decrease in the price level boosts interest rates, which discourages borrowing and hence frees up income for more planned real expenditures.
Which of the following shifts short-run, but not long-run aggregate supply right?
a. a decrease in the actual price level b. a decrease in the expected price level c. a decrease in the capital stock d. an increase in the money supply
Sustained long-term economic growth comes from decreases in worker productivity, which essentially means how well we do things.
Select whether the statement is true or false. A. True B. False
What is the difference between revenue and cost?
A. Input B. Production C. Output D. Profit