Why does the short-run equilibrium situation usually not last long?
a. Firm downsizing happens in the long run.
b. Government regulations are applied in the long run.
c. Higher taxes are enforced in the long run.
d. Entry and exit happen in the long run.
d. Entry and exit happen in the long run.
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Using the quantity theory of money, in the long run a 3 percent increase in the quantity of money leads to a 3 percent
A) increase in real GDP. B) decrease in the price level. C) increase in the price level. D) decrease in the real interest rate. E) increase in the real interest rate.
Holding everything else constant, if the nominal interest rate decreases, the interest paid on the debt will ________ the debt-to-GDP ratio, and nominal GDP growth will ________ the debt-to-GDP ratio
A) increases; increases B) increases; decreases C) decreases; increases D) decreases; decreases
Refer to Figures d and e. Water is crucial for survival, but it is particularly valuable during a drought when water is scarce. The probability of a drought is (1 - P), WD represents the quantity of water in a drought, while WR represents the quantity of water in a rainy season. Which set of indifference curves above best represent a relatively high probability of a drought?
A. Figure d
B. Figure e
C. Probabilities do not influence indifference curves.
D. Both Figures represent a relatively low probability of a drought.
If hiring one more worker causes the average product of labor to fall, then:
A. the marginal product of labor is less than the average product of labor. B. the marginal product of labor is equal to the average product of labor. C. the marginal product of labor is greater than the average product of labor. D. the marginal product of labor is negative.