Suppose the economy is in long-run equilibrium and there is an increase in investment. As a result, real GDP will ________ in the short run, and ________ in the long run
A) increase; increase further
B) increase; decrease to its initial value
C) decrease; decrease further
D) decrease; increase to its initial level
Answer: B
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If, for a product, the quantity supplied exceeds the quantity demanded, the market price will fall until
A) all consumers will be able to afford the product. B) the quantity demanded exceeds the quantity supplied. The market will then be in equilibrium. C) quantity demanded equals quantity supplied. The equilibrium price will then be lower than the market price. D) quantity demanded equals quantity supplied. The market price will then equal the equilibrium price.
Economists who are in favor of an increase in the size and scope of government tend to prefer ________________ when expansionary _______________ policy is needed to raise aggregate demand
A) tax cuts; fiscal B) tax cuts; monetary C) more government spending; fiscal D) more government spending; monetary
The number of presidentially appointed members who sit on the Federal Reserve Board of Governors is:
A. none. B. seven. C. nine. D. twelve.
Savers are willing to lend out money because:
A) they prefer to spend money in the future rather than today. B) the rate of inflation in an economy is normally positive. C) of altruism. D) the rate of inflation in an economy is normally negative.