The actual time length of the short run is determined by when diminishing marginal returns start
Indicate whether the statement is true or false
False. The actual time length of the short run is a function of how long it would take to adjust all inputs.
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An increase in the government budget surplus will shift the ________ curve for loanable funds to the ________ and the equilibrium real interest rate will ________
A) demand; right; rise B) demand; left; fall C) supply; left; rise D) supply; right; fall
According to the contract theory of wages, firms and workers agree on a contract that fixes
a. money wages. b. real wages. c. money wages and employment. d. real wages and employment.
Which of the following is an argument for tax cuts rather than government spending as a way to promote recovery from a recession?
a. Tax cuts are better suited to direct resources into projects that consumers value more highly than the resources required for their production. b. 100 percent of a tax cut will stimulate aggregate demand, but this will not be the case for an increase in government expenditures. c. Tax cuts will encourage rent seeking; increases in government spending will not. d. Tax cuts will change the structure of aggregate demand more than increases in government spending.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and reserve-related (central bank) transactions in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and reserve-related (central bank) transactions become more negative (or less positive). b. The GDP Price Index and reserve-related (central bank) transactions remain the same. c. The GDP Price Index falls, and reserve-related (central bank) transactions remains the same. d. The GDP Price Index rises, and reserve-related (central bank) transactions become more positive (or less negative). e. The GDP Price Index rises, and reserve-related (central bank) transactions remains the same.