Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential
B. higher; potential
C. higher; higher
D. lower; higher
Answer: B
You might also like to view...
Today U.S. protectionism is concentrated in
A) high-tech industries. B) labor-intensive industries. C) industries in which Japan has a comparative advantage. D) computer intensive industries. E) capital-intensive industries.
A rising standard of living will:
A. necessarily reduce the population by reducing the birthrate. B. increase the birthrate. C. reduce the birthrate, but population may continue to grow if the death rate falls more quickly. D. reduce the birthrate initially but will increase the birthrate significantly at higher levels of income as people can afford to have more children.
If a firm charges a price equal to the marginal cost-the competitive solution-then the gains from trade are
A. all in the form of producer surplus. B. all in the form of consumer surplus. C. split between producer and consumer surplus. D. split between shareholders and producers.
Income elasticity relates to
A) a movement down a demand curve. B) a movement up a demand curve. C) a horizontal shift in a demand curve. D) the percentage change in quantity demanded divided by the percentage change in the price.