The long run is defined as a time period during which full adjustment can be made to any change in the economic environment. Thus in the long run, all factors of production are variable. Long-run curves are sometimes called planning curves, and the long run is sometimes called the
A. non-adjustment period.
B. planning horizon.
C. foreseeable future.
D. minimum efficient time period.
Answer: B
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Which of the following is true?
A. If capital is highly mobile, fiscal policy then loses its effectiveness under a fixed exchange rate. B. Fixed exchange rates encourage countries to have different goals, priorities, and policies with respect to macroeconomic variables. C. Countries that want to have a fixed exchange-rate regime should be willing to refrain from policy changes that lead to large international capital flows. D. For a floating exchange rate to work for a country, it cannot have an inflation rate that is much above the inflation rate(s) of its primary trading partners.
The effect of opening trade between countries is
A. living standards rise in the country with efficient, high-pay workers. B. both countries can exploit comparative advantage and increase productivity. C. total world production increases as both countries specialize in specific goods. D. All of the above are correct.
The real rate of interest is 4% and the anticipated rate of inflation is 1%. What is the nominal rate of interest?
A) 1% B) 3% C) 4% D) 5%
Public television periodically runs pledge drives to raise money. Only a small percentage of the people who benefit from public television are willing to pay. This low percentage of people willing to contribute illustrates a difficulty with:
A. tax incentive policies. B. government regulation. C. voluntary programs. D. market incentive programs.