Distinguish between the short-run and long-run factors that affect residential investment
What will be an ideal response?
Demographic factors such as population trends, migration patterns, and rate of household formation encompass the major long-run factors that influence new residential investment. The behavior the business cycle in terms of employment, interest rates, and inflation are considered short-run factors.
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In a simple macroeconomic model, replacing the assumption of exogenous investment with the accelerator theory of investment ________ the effect on equilibrium GDP of fiscal policy changes, and ________ the effect on equilibrium GDP of changes in
autonomous consumption. A) increases, increases B) increases, dampens C) dampens, increases D) dampens, dampens
The effect of a shift in the aggregate demand curve due to an increase in consumer confidence will be:
A. an increase in both prices and output in the short run. B. a decrease in prices only in the long run; output will remain the same. C. a decrease in both prices and output in the short run. D. an increase in output only in the long run; prices will remain the same.
Explain why a firm must consider variable costs rather than fixed costs, when deciding whether to produce
If there is a good that is consumed almost entirely by the elderly, an aging of the overall population would
A. cause a movement along the demand curve to a (higher price, lower quantity) point. B. move its demand curve to the left. C. cause a movement along the demand curve to a (lower price, higher quantity) point. D. move its demand curve to the right.