Comment on the following statement. "Once general equilibrium is achieved this will result in a long-run equilibrium as well."
What will be an ideal response?
First of all it is unlikely that general equilibrium would occur in the first place because all of the conditions that are necessary for it to take place do not appear to have taken shape in the real economy. But even if general equilibrium were possible it is unlikely that this would be a permanent state of affairs as there will always be changes in demand and supply in input and output markets that will disturb this equilibrium.
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If the MPC = 0.8, and planned autonomous investment increases by $80 billion, then equilibrium real GDP will increase by
A) $320 billion. B) $80 billion. C) $400 billion. D) $64 billion.
Using the Coase theorem, why might a firm that currently pollutes a river no one owns pollute the river less if it owned the river?
What will be an ideal response?