Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
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If the HHI for an industry equals 3,200,
A) firms in the industry are most likely to make zero economic profit B) the industry is probably an oligopoly C) firms in the industry are likely to act independently of each other D) firms in the industry must enter a cartel in order to earn an economic profit E) the industry is almost surely monopolistic competition
A "search good" is:
a. One that depends on how the product behaves over time b. A product whose quality is only found out over time by finding how durable it is c. Like a peach that can be examined for flaws d. Like a used car, since it is easy to determine its inherent quality e. None of the above
If the Fed sells bonds, we should expect to see the money supply
a. decrease, the interest rate increase, autonomous consumption decrease, business investment decrease, and real GDP decrease b. increase, the interest rate decrease, autonomous consumption decrease, business investment decrease, and real GDP decrease c. increase, the interest rate decrease, autonomous consumption increase, business investment increase, and real GDP increase d. decrease, the interest rate decrease, autonomous consumption increase, business investment increase, and real GDP decrease e. decrease, the interest rate increase, autonomous consumption increase, business investment increase, and real GDP increase
Assume that the expectation of declining housing prices cause households to reduce their demand for new houses and the financing that accompanies it. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and current international transactions in the context of the Three-Sector-Model?
a. The real risk-free interest rate falls, and current international transactions become more positive (or less negative). b. The real risk-free interest rate rises, and current international transactions become more negative (or less positive). c. The real risk-free interest rate falls, and current international transactions remain the same. d. The real risk-free interest rate rises, and current international transactions remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.