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

Economics

You might also like to view...

When a negative externality exists, the private market produces

A) products at a low opportunity cost. B) less than the economically efficient output level. C) products at a high opportunity cost. D) more than the economically efficient output level.

Economics

Social demand is equal to

A. Tax revenue plus or minus externalities. B. Public demand plus or minus externalities. C. Market demand plus or minus externalities. D. Private goods plus or minus externalities.

Economics

"Transaction costs" make it more difficult to reduce externalities, both negative and positive, because transaction costs

What will be an ideal response?

Economics

Refer to the diagram, where S d and D d are the domestic supply and demand for a product and P c is the world price of that product. With a P c P t per-unit tariff, the quantities sold by foreign and domestic producers respectively will be:



A.  xz and x.
B.  xv and xz.
C.  x and xz.
D.  wy and w.

Economics