Investment is
A. a negative function of real GDP.
B. a positive function of real GDP.
C. a positive function of interest rates.
D. autonomous with respect to real GDP.
Answer: D
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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
Game theory is used to analyze the interactions among firms in ________
A) oligopoly B) perfect competition C) monopoly D) monopolistic competition E) Both answers A and D are correct.
The concept of minimizing the number of physical units of the inputs needed for a given amount of output is known as
a. technical efficiency. b. the principle of diminishing marginal returns. c. economic efficiency. d. decreasing returns to scale.
Why do college graduates earn more in wages than workers with only a high school diploma?