Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; higher
C. lower; higher
D. higher; potential
Answer: D
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A pharmaceutical company hired two analysts to independently calculate the elasticity of supply of its product. According to Analyst A, the price elasticity of supply for the company is 0.36, and according to Analyst B, the price elasticity of supply is 0.88 . Assuming that neither analyst has made a mistake in calculations, it can be concluded that: a. Analyst A studied the data for a longer
period of time than Analyst B. b. Analyst A studied the data for a shorter period of time than Analyst B. c. the data provided by the company had variations in it. d. the average of the two values can provide the accurate price elasticity of supply.
If there is a political business cycle and the Federal Reserve supports the incumbent, then we should expect that prior to elections
a. interest rates and output would rise. b. interest rates would rise and output would fall. c. interest rates would fall and output would rise. d. interest rates and output would fall.
The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product
Indicate whether the statement is true or false
Free trade refers to trade between countries without government restrictions
Indicate whether the statement is true or false