Suppose the economy is in long-run equilibrium. In a short span of time, there is a large influx of skilled immigrants, a major new discovery of oil, and a major new technological advance in electricity production. In the short run, we would expect
a. the price level to rise and real GDP to fall.
b. the price level to fall and real GDP to rise.
c. the price level and real GDP both to stay the same.
d. All of the above are possible.
b
You might also like to view...
People specialize in activities in which they have a comparative advantage
A) if they know they are more productive than anyone else in the particular activity. B) only if they understand the logic of comparative advantage. C) when they expect to obtain more of whatever they want by doing so. D) only when all of the above are true.
Refer to Figure 27-1. Suppose the economy is in short-run equilibrium below potential GDP and Congress and the president lower taxes to move the economy back to long-run equilibrium
Using the static AD-AS model in the figure above, this would be depicted as a movement from A) A to B. B) C to B. C) B to C. D) A to E. E) B to A.
Which of the following would encourage the development of new technologies?
a. Rising interest rates b. Reduced government subsidies for research and development c. Falling wages d. Increased tax rates on corporate profits e. Increased patent protection for inventions
In 1997, there was a speculative attack on the Thai baht. This resulted from the:
A. belief by speculators that the Thai central bank didn't have sufficient U.S. dollar reserves to maintain the current fixed rate. B. revelation that the Thai central bank had converted its gold reserves into foreign exchange. C. belief by speculators that the Thai central bank had an oversupply of U.S. dollar reserves. D. overthrow of the Thai president and the central bank.