As the price level falls
a. people are more willing to lend, so interest rates rise.
b. people are more willing to lend, so interest rates fall.
c. people are less willing to lend, so interest rates fall.
d. people are less willing to lend, so interest rates rise.
b
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
If labor and capital are perfect complements in production, short run supply curves are vertical.
Answer the following statement true (T) or false (F)
Which of the following will cause the aggregate demand curve to shift to the right?
A) An increase in the price level B) An increase in the interest rate C) An increase in money demand D) An increase in investment expenditures
Examples of barriers to entry include
A. Economic profits. B. Standardized products. C. Price taking. D. Patents.