In the long run, does it matter whether a policy action was anticipated or not?
What will be an ideal response?
In the long run, output is potential output. The response to an anticipated policy action comes sooner, but is ultimately no different than the delayed response to a "recognized" policy. Nonetheless, it does matter whether or not the policy had been anticipated, because anticipated policies are less destabilizing to output.
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A) i only B) ii only C) iii only D) i and iii E) i, ii, and iii
Economies of scale exist when the ________ a unit of a good ________
A) average cost of producing; falls as its output rate increases B) price; falls as its input rate decreases C) price; rises as its output rate increases D) average cost of producing; rises as its input rate increases
Assume that an increase of $300 in exports leads to an increase of $750 in equilibrium income. If the marginal propensity to import equals 1/10, the marginal propensity to save must be _____
a. 0.60 b. 0.50 c. 0.40 d. 0.30 e. 0.25
If the nation's investment opportunities are highly attractive relative to those available abroad, the nation will tend to
a. experience an outflow of capital and a trade deficit. b. experience an outflow of capital and a trade surplus. c. experience an inflow of capital and a trade deficit. d. experience an inflow of capital and a trade surplus.